By Michael Finney and Simone Chavoor, KGO ABC TV-7, San Francisco, CA

August 16, 2019…

SAN FRANCISCO (KGO) -- Mercury Insurance fined $27.6 million for scheme to overcharge customers

Mercury Insurance Company has been ordered to pay a $27.6 million dollar fine by the California Supreme Court, after they were found to be overcharging their customers.

In 1988, Proposition 103 was approved by voters. It required insurance companies to charge fair premiums, and to get the Insurance Commissioner's approval for their rates before they went into effect. However, Mercury was found to add on "broker fees" on top of their premiums in order to circumvent the law.

The ensuing decades-long legal battle between Mercury and the California Department of Insurance resulted in Insurance Commissioner Dave Jones assessing a $150 fine for each of Mercury's 183,000 violations between 1999 and 2004. Yesterday, the California Supreme Court rejected Mercury's petition for review, upholding the $27.6 million fine. It is the largest fine ever assessed against a car insurance company in California.

Mercury is the seventh largest insurer in the state.