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In August 2008, Liberty Mutual Insurance Company submitted applications to the California Department of Insurance for a rate increase of 4% and revisions to its auto rating factor plan (that’s the plan an insurer uses to distribute rates among its different policyholders, for example, charging less to someone who drives 5,000 miles versus charging more to someone who drives 15,000 miles).

Consumer Watchdog intervened in October 2008, identifying various reasons why Liberty's proposed rates were excessive and their auto rating factor plan violated the law. For example, Liberty Mutual required married people to live together to receive the “married” discount and failed to give the statutorily required 20% Good Driver Discount to all drivers who were eligible. 

After years of countless meetings with the Department of Insurance, the parties agreed that, instead of a 4% increase, Liberty Mutual would implement a 5.9% decrease in its rates and fix several deficiencies in its auto rating factor plan to make it legal and fair.

The difference between Liberty's original proposed rate and the rate are now going to enact is $24 million. That's money that will be staying in California drivers' pockets this year instead of getting sucked up by an insurance company.