Instead of Requested Increase in Rates, Liberty Mutual Gets Large Decrease
Posted by Todd Foreman
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.
1/13/2016News ReleaseConsumer Advocates Ask Auto Safety Agency to Make New Technologies Standard Equipment; Urge NHTSA Not to Defer to Industry “Self Regulation”Santa Monica, CA -- Three of the nation’s top consumer advocates today asked the National Highway Traffic Safety... More >
8/24/2016News ReleaseConsumer Watchdog Blocks Commerce West 12% Auto Insurance Rate Hike Proposal; Policyholders Save Over $8.2 MillionSanta Monica, CA – Following Consumer Watchdog's petition for a hearing on Commerce West's application to increase... More >
6/20/2016News StoryAs the driverless car gets closer to reality, so too does the dilemma of how to insure the car and its owner. The auto insurance... More >
1/9/2015News ReleaseCourt Tentatively Upholds Prop 103 Rule Prohibiting Auto Insurance Companies From Making Consumers Pay For “Branding” Advertising Such as Sporting Event Sponsorships and Naming RightsSacramento, CA – In a tentative ruling today, the Sacramento Superior Court rejected an insurance industry attack on... More >
1/12/2015News ReleaseSanta Monica, CA – Mercury Insurance has been ordered by the California Insurance Commissioner to pay a historic $27.5... More >