Motorcyclists due $15m in refunds

AG reaches settlement with Commerce, based on overvaluation of older bikes

More than 40,000 Massachusetts motorcycle owners who were overcharged for insurance in recent years will share nearly $15 million in refunds as the result of a settlement with Commerce Insurance Co., Attorney General Martha Coakley said Monday.

The $14.6 million settlement is the largest in a four-year investigation by the attorney general’s office into motorcycle insurance billing practices and represents nearly a quarter of the $57.4 million in total refunds that insurers have paid to the state’s consumers so far.

Webster-based Commerce, which writes the largest share of automobile and motorcycle insurance in Massachusetts, allegedly overvalued bikes and did not account for depreciating values of older motorcycles in calculating premiums for customers from 2002 to 2011, according to Coakley’s office.


“Identifying these troubling overcharges continues to underscore the need for transparency in auto insurance rating practices,” Coakley said in a statement.

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Commerce, which is owned by the Spanish insurer Mapfre Group, will give back customers anywhere from $50 to $12,000, with the refunds averaging $360. In a statement, Commerce said it has adopted procedures to prevent such problems and believes that the settlement is in the best interest of its customers.

Coakley’s office launched the investigation after a consumer complained that for five years he was charged for his 1999 Harley-Davidson Road King Classic as if it were brand-new. As a result, the motorcycle owner had paid $1,500 more in premiums over that period, Coakley said.

Coakley found that the practice was widespread. Since 2010, 19 insurance companies have settled with Coakley’s office. Some of the state’s largest auto insurers, including Liberty Mutual, Arbella Insurance, and Safety Insurance, have paid millions in settlement costs.

For most of these companies, motorcycle insurance is a small share of their vehicle insurance business, and many just used a formula without depreciation, said Doc D’Errico, the vice chairman of the Massachusetts Motorcycle Association. Until the attorney general’s office got involved, most of these companies dismissed consumer complaints that the calculations were unfair, D’Errico said.


Refunds have gone to more than 150,000 consumers statewide since Coakley launched the investigation. D’Errico received a refund of $800 a few years ago for his Harley-Davidson Ultra Classic after the state’s settlement with Liberty Mutual in 2010.

“If something happened to the bike, they weren’t giving me the sticker value. It’s certainly unfair,” D’Errico said. “There are a lot of people out there who are going to get some nice change back.”

Deirdre Fernandes can be reached at Follow her on Twitter @fernandesglobe.