AG Coakley Caught in Between Two Sides in Auto Insurance Dispute


Being in the middle of a legal dispute over Boston State’s competitive automobile insurance system is a tight spot to be in. That is precisely where Attorney General Martha Coakley is – defending the Patrick administration which she accused of as “playing favorites” in setting auto insurance legislations.

AG Coakley Caught in Between Two Sides in Auto Insurance DisputeA lawsuit has been filed that claims that some of the auto insurance rules provide favorable lee-ways for national companies, including Progressive Insurance and Geico, among others.

Since the Attorney General, incidentally on a campaign trail for a US senate seat, is also on the side of defending consumer rights, she is caught in the middle of a legal crossfire.

Coakley unabashedly targeted the impact of Governor Deval Patrick’s market deregulation scheme. Through a report released from her office last December 24, she revealed several details of current market operations, financial profits gained by insurance companies, and the larger price mark-ups which consumers have to deal with.

She added that customers may actually be getting less protection and benefits than expected.

This lawsuit against Patrick was filed by Arbella Mutual Insurance Corporation (AMIC). Claiming that the state rules put it at a disadvantage, this case is presently pending a decision by the state’s Supreme Judicial Court. A verdict is expected by the end of this month.

Attorney General spokeswoman, Amie Breton, admitted that Coakley is “required to assume several roles.” She is expected to serve as a consumer advocate as well as represent state agencies in the judiciary.

AMIC spokesman, Doug Bailey, said the corporation welcomed support from the Attorney General.

Attorney Peter Robertson explained that Coakley will have a lot on her hands since she brought before the court evidence which indicated that state officials “acted reasonably” in implementing laws, but the December report accuses the same officials of “playing favorites.”

In Boston, before 2007, boundaries were set for insurance rates even if companies were permitted to charge lower rates based on their own initiative.  In the state’s new deregulated system, insurers were allowed to establish their own rates on their own terms.  These new policy revisions and rate hikes placed unknowing customers at a disadvantage.

This new system resulted in less transparency for rate-setting procedures as insurance companies gained higher profits.

The normative standard for rating consumers in this new system, was based more on socio-economic status instead of client driving records.

According to Coakley, customers of various age groups are forced to pay more regardless of whether they had an accident or a road violation on record.

In the December report, several recommendations were provided to espouse for better openness and consumer protections.