Official: Massachusetts businesses overcharged $1 billion for commercial auto insurance

Businesses in Massachusetts have been overcharged by about $1 billion for auto insurance over the past seven years, Attorney General Martha Coakley wrote in a letter to Insurance Commissioner Joseph Murphy.

Coakley is asking Murphy to use his authority to reduce commercial auto insurance rates in Massachusetts. Coakley’s letter was written May 23, 2011.

Coakley’s figures were based on a review of data from the National Association of Insurance Commissioners and Automobile Insurers Bureau. The data show Massachusetts businesses were overcharged $150 million a year for commercial auto insurance between 2004 and 2010, adding up to about $1 billion.

“These inflated commercial auto premiums impact virtually every industry in Massachusetts – from manufacturing, trucking, and construction to sales and services,” Coakley wrote. “The added costs limit the ability of businesses to invest in Massachusetts and cost Massachusetts residents thousands of jobs.”

James Harrington, executive director of the Massachusetts Insurance Federation, says Coakley’s letter misses the mark, according to The Associated Press. He says commercial auto insurance rates in Massachusetts actually have fallen nearly 30 percent since 2004 thanks to increased competition.

–InsuranceQuotes.com staff