Thousands of motorcycle owners are about to get some money back from their insurance companies. Three different insurance companies who have been overcharging their customers have reached a settlement with the Massachusetts attorney general’s office. This is good news for consumers.
Motorcycle insurance functions very similarly to a typical auto insurance policy. Auto insurance will cover cars, trucks, vans, and other types of vehicles that have four wheels, but it excludes coverage for motorcycles. Therefore, people who drive motorcycles are going to have to purchase motorcycle insurance. In some states, all motorcycle drivers are required to have this type of insurance policy.
In general, I think most people feel as though they are paying way too much for their insurance premiums. There are many auto insurance companies that have produced advertisements that start with one very provocative question. That question is: “Are you paying to much for car insurance?”
One motorcycle driver in Massachusetts had good reason to believe that he was being charged too much for his motorcycle insurance policy. This consumer owned a 1999 Harley-Davidson Road King Classic. In the years between 2003 and 2008, his insurance company decided to calculate the cost of his insurance premiums. The insurer did the calculations as though his 1999 Harley was brand new.
The insurer pretended that the 1999 Harley-Davidson Road King was worth $20,000 in 2003, and the insurer continued to believe this calculation through 2008.
In reality, the motorcycle’s value had dropped by 2003. By 2008, the motorcycle was nine years old, and worth less than $12,000. This depreciation was not reflected in the amount of money this consumer was having to pay for his motorcycle insurance premiums. He paid more than $15,000 in overcharges to his insurer.
This particular motorcycle owner filed a lawsuit, which has recently been settled. This means that several insurance companies will be sending rebate checks to their customers who were overcharged for their motorcycle insurance.
Premier Insurance Co. of Massachusetts is part of Travelers Insurance. This insurer will be paying out refunds that total to $5,000,366. American Automobile Insurance is part of Fireman’s Fund. This insurer has to pay out refunds that total to $571,398. Electric Insurance Co. will be paying out refunds that total to $123,882.
The average refund check will total around $400. There will be 1,424 refund checks that each total over $1,000. There will also be 2,031 refund checks that each are for somewhere between $501, and $1,000. Around 4,488 refund checks will each be worth under $100. Overall, this settlement will return almost $40 million to Massachusetts motorcycle owners who were overcharged by their insurance companies.
Image by Dimtry Boyko on Flickr