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Progressive Settles Rate Quote Complaint

Massachusetts consumers complained quotes were inaccurate

May 27, 2009
Progressive Insurance saturates the airwaves with its commercials for vehicle coverage, promising lower rates by comparing coverage offered by other companies. But Massachusetts Attorney General Martha Coakley charges those quotes weren't always accurate.

Coakley says that Ohio-based Progressive Direct Insurance Company has agreed to resolve allegations that the insurer provided consumers with inaccurate quotes on its rate comparison website, paying $120,000 to the Commonwealth and reimbursing overcharged consumers.

“For competition to truly work in Massachusetts, consumers must be able to easily access accurate information about rates from insurance companies,” Coakley said. “Progressive’s failure to provide correct comparison quotes harmed consumers and harmed Massachusetts’ ability to introduce a competitive system in automobile insurance.”

Coakley claims Progressive offered misleading and inaccurate comparison rates for Arbella Mutual, Liberty Mutual and Commerce Insurance companies on its rate comparison website. Across the country, Progressive advertises that the company will instantaneously provide comparison quotes for its competitors when a driver seeks a quote on the insurer’s website.

Progressive began offering this service in Massachusetts when it began selling policies on May 1st last year. The inaccuracies included the quoting of prices for 12-month policies, while stating the quote was for a 6-month policy, Coakley said.

In December 2008, Progressive notified the Attorney General’s Office about the rate inaccuracies and during took down its rate comparison tool for Massachusetts quotes. The company also stopped offering comparison quotes through its call centers for Massachusetts consumers. To date, comparison quotes are not being offered to Massachusetts consumers by the company.

The Attorney General’s Office also alleged that Progressive failed to obey its own rating practices that the company agreed to follow when it filed its rules last year with the Division of Insurance. In its rules filing, Progressive stated that it would not charge consumers for additional drivers listed on their policy that carried his or her own insurance.

However, despite these filed rules, the Attorney General’s Office claims that Progressive charged some Massachusetts policyholders higher rates to include already insured drivers on their policies. Under the terms of today’s agreement, Progressive agreed to reimburse any consumer who was improperly charged for listing such a driver on their policy.

In its rules filing, Progressive also agreed that the company would send a transfer notice to a customer’s former agent or insurance company that states that Progressive is now writing that driver’s policy. These notices are routinely sent once a consumer switches insurance companies. However, the Attorney General’s Office alleges that Progressive failed to send the required notice in many instances.

Due to this practice, many Massachusetts insurance agents have complained that their consumers were being cancelled for nonpayment by their former carrier. Being canceled for nonpayment may affect a consumer’s credit, or prevent him or her from being able to pay in installments for future insurance policies. Under the terms of today’s settlement, Progressive agreed to assist any consumer whose former agent or carrier did not receive a transfer notice to correct their record or credit history.

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