California regulators claim Mercury Insurance is charging drivers excessive fees

Drivers may not be getting the best possible rate from Mercury Insurance, according to state regulators.

Drivers might not be getting the very best fee from Mercury Insurance coverage, in accordance with state regulators.

Caltrans

The California Division of Insurance coverage introduced Monday that it’s going to take authorized motion in opposition to Mercury Insurance coverage over a wide range of techniques the corporate is utilizing to drive up prices for drivers, owners and companies.

Within the division’s authorized grievance, Insurance coverage Commissioner Ricardo Lara alleges that Mercury directed motorists with good driving data to the corporate’s larger priced insurance policies, somewhat than the decrease priced insurance policies they have been eligible to obtain.

“Failure to promote good drivers, the bottom priced insurance coverage coverage they qualify for is against the law, and my division will act on behalf of customers and pursue most penalties in opposition to Mercury for dangerous religion,” stated Insurance coverage Commissioner Ricardo Lara.

Representatives for Mercury Insurance coverage didn’t instantly reply to a request for remark.

In 1988, California voters handed Proposition 103, which mandated a 20% low cost for drivers with a clear driving report with no driving-related offenses, accidents, convictions, or factors from the earlier three to seven years.

Lara stated in her grievance that Mercury used a lot of artistic methods to steer so-called good drivers into shopping for its costly insurance policies. Among the many alleged techniques:

The corporate doesn’t provide month-to-month fee plans on its lowest priced insurance policies.

It instructs dealerships to refuse to write down low-price insurance policies when drivers are unlocked for non-payment or when drivers have been concerned in automobile accidents that weren’t thought-about their fault.

It sells equivalent insurance policies below two completely different firm names and tells drivers that the low-price insurance policies one affiliate sells have considerably much less protection and extra restrictive fee choices than these charged by the opposite subsidiary. Protection, nonetheless, is identical.

Within the case of business drivers, Mercury charged them as in the event that they have been new drivers if that they had not been listed as a policyholder at an organization that they had labored for inside the previous two years. The corporate did this regardless that drivers had beforehand saved the Mercury coverage.

“My message to Mercury and different insurers attempting to evade the legislation is evident,” Lara stated. “Unfair and unlawful practices won’t be tolerated and I’ll struggle to make sure customers get the reductions they’re entitled to below the legislation.”

The commissioner stated he believes Mercury has additionally benefited from the actions it has taken with owners. For instance, the authorized grievance that claimed Mercury didn’t resolve discrepancies in sq. ft between buyer purposes and Mercury’s inspection reviews. The grievance famous that as a result of sq. ft have been used to find out premiums, these discrepancies might have resulted in charges that have been “extreme, insufficient, or unfairly discriminatory.”

In whole, the insurance coverage commissioner filed 34 costs in opposition to Mercury Insurance coverage. Lara and Mercury’s crew must current proof to an unbiased administrative legislation choose. The executive legislation choose points a proposed determination, which is then accepted or rejected by the commissioner. Mercury has the fitting to enchantment the commissioner’s determination by submitting a lawsuit with the Supreme Court docket.

In August 2019, Mercury paid a $27.6 million wonderful to the California Division of Insurance coverage for locating that it had violated Provide 103. This was the most important wonderful in opposition to a property and casualty insurance coverage firm within the company’s historical past. The California Supreme Court docket upheld the division’s motion, discovering that Mercury had charged customers unapproved and unfair discriminatory costs.

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Kathy Anderson covers healthcare for The Bee. Her mother and father grew up blue collar individuals who paid out of their pockets for care. She joined The Bee in 2002, and has held roles together with enterprise columnist and article editor. She beforehand labored for newspapers together with the Dallas Morning Information, Detroit Information and Austin American Statesman.