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Insurance company caught short-changing RI drivers

Consumer Investigations

CRANSTON, R.I. (WPRI) — Liberty Mutual Insurance Group was caught short-changing Rhode Island drivers whose vehicles were totaled in crashes, Target 12 has learned.

The R.I. Department of Business Regulation (DBR) received a consumer complaint, detailing a December 13, 2016, crash involving a 2006 Honda Civic.

The driver of the vehicle, whose name has been redacted from documents obtained by Target 12, claimed Liberty Mutual used an “illegal valuation method for the determination of fair market value” of the totaled car.

According to the complaint, Liberty Mutual offered to settle the total loss claim for $4,200, while the NADA fair market value for the vehicle was almost $6,000. NADA is a state-approved vehicle value publication.

The consumer complaint prompted DBR to investigate more than 2,000 total loss claims paid out by Liberty Mutual from Oct. 2015 through Jan. 2017.

The state found Rhode Island vehicle owners were owed money in 126 cases.

According to a consent agreement between DBR and Liberty Mutual, the company was required to issue 126 refunds to customers, totaling $103,512.27 plus interest because NADA values had not been considered for claim settlements.

Liberty Mutual also had to refund 115 title fees, totaling $6,035.67 plus interest.

Liberty Mutual spokesperson Glenn Greenburg declined Target 12’s request for an on-camera interviews, but sent a statement acknowledging the improper vehicle valuations.

In some instances, we did not properly apply the requirements of a new insurance regulation which resulted in improper vehicle valuations for a small percentage of our Rhode Island customers with a total loss claim.  In addition, our own comprehensive audit of our Rhode Island total loss claim files revealed a smaller group of customers were mistakenly underpaid on their title transfer fees.  We regret these errors and any inconvenience caused to these customers, and those impacted were promptly refunded any monies due with interest.  We have since implemented corrective procedures to eliminate similar errors in the future.”

The state fined the insurance company $30,000.

This isn’t the first time Liberty Mutual had to pay up for improper vehicle valuations. In 2015, DBR fined the company $10,000 after discovering 130 customers were owed refunds worth $90,869.

Susan Campbell ( is the Call 12 for Action and Target 12 consumer investigator for WPRI 12 and Fox Providence. Follow her on Twitter and on Facebook.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.


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