Warning: Progressive to increase some rates by 23% in Massachusetts

Posted by on Feb 23, 2011 in Auto Insurance, Downey Insurance, Insurance, Personal Insurance

After coming into the Massachusetts market in May of 2008 Progressive Insurance has had a very bumpy ride.   When Progressive first came on-line in MA we received many calls from our clients who had self quoted their policy on Progressive’s website. 

Unfortunately Progressive was using some very deceptive tactics to get people to leave the comfort of their trusted insurance professionalsand purchase their policy on-line from some computer server without a review from their current insurance professional who understands that individuals unique protection needs. 

Thank goodness most of our clients had the insight to call us so we could show them the where they were being deceived.   The most common deception that we found was not including premium for surcharge points added by the DMV even though they are requiring applicants to submit their social security number.  The quote process also informs applicants that Progressive obtains credit reports and confidential credit scoring information, which is prohibited in Massachusetts for both rating and underwriting purposes.  

Other  misleading practice’s that Progressive was utilizing to it’s own advantage included quoting short term policy’s not covering the full 12 months required by MA law, and most importantly not informing our clients about the danger in the reduction of coverage they were  quoting compared to the level of protection that they are insured at currently.

We were not the only agency that was taking notice, the Massachusetts Association of Independent Insurance Agents filed a formal complaint with the MA Division of Insurance stating similar grievances, and they released a press release to all of their member agents warning them of these deceptive practices.

Now 3 years later after luring MA residents with their to good to be true rates they are attempting an unprecedented rate hike.  This time it is Massachusetts Attorney General Martha Coakley that is taking on the on-line insurance retailer.

From Boston.com February 10th, 2011- Attorney General Martha Coakley is pressing Massachusetts regulators to reject auto insurer Progressive Corp.’s plans to hike the rate for commercial customers by 23.5 percent.

Coakley says in a letter to the Division of Insurance that Progressive’s proposed rates were excessive and unfair to Massachusetts businesses. She also argues that the information used by the Mayfield Village, Ohio-based firm to justify the hike was inconsistent with its proposal.

Coakley says Progressive’s request contradicted its actual claims history, as well as Massachusetts’ overall claims history. The firm has refused to provide the Attorney General’s Office key data or answer questions about its calculations.

But a spokeswoman says Progressive provided insurance regulators and the Attorney General’s Office with all of the documentation necessary to support the request for a rate hike.