Mercury Insurance wants to hike its already excessive homeowner’s insurance rates: Mercury’s stalling tactics have already cost its policyholders $25 million, and each day that Mercury is allowed to overcharge its policyholders amounts to $35,000 in excess profits.
In May 2009, Mercury Insurance sought to hike its homeowners' insurance rates 4% across the board. In June 2009, Consumer Watchdog petitioned the Department of Insurance for a hearing to block the requested rate increase. Since that time, the Department has refused to approve any increase and instead has requested data from Mercury to determine the appropriate rates its policyholders should be paying.
According to Consumer Watchdog’s current estimate, instead of an increase, Mercury’s homeowners' rates should be decreased by roughly 7%, which means that Mercury is and has been overcharging its policyholders by nearly $13 million per year and over $35,000 a day. Rather than agreeing to lower its current rates, however, Mercury has stalled time and time again by taking months to provide data requested by the Department and Consumer Watchdog.
Last month, determining that Mercury could stall no more, Insurance Commissioner Jones granted Consumer Watchdog’s petition for hearing. Mercury will now have to justify its rates in a public hearing before an administrative law judge to be held in December of this year.
According to Mercury, even if the Commissioner finds that Mercury has been overcharging homeowners for the last two years, Mercury gets to keep that money rather than giving it back to its policyholders. Consumer Watchdog thinks this is wrong and will seek refunds for Mercury’s customers after it forces Mercury to lower its excessive rates.