Wednesday, August 28, 2002
Singles being cheated by car insurers
A story published today by the St. Petersburg Times reports that a half-dozen auto insurance companies in Florida are being sued for allegedly overcharging customers for coverage against collisions with uninsured motorists.
The six related lawsuits filed Monday in Pinellas County focus on customers who insure a single vehicle. Some insurance companies routinely charge such customers for "stacked" coverage designed for multiple-vehicle owners instead of less-expensive "unstacked" coverage, the suits charge.
"We don't agree the agents should be selling (stacked coverage), especially not to people that are getting absolutely no benefit from it," said St. Petersburg lawyer Bill Saron, one of several attorneys filing suit.
Typically, Saron said, someone paying annual premiums of $100 or more for stacked insurance could cut those premiums in half by paying for unstacked.
Saron and his associates allege the practice is not only abusive but commonplace, with thousands of policyholders statewide overcharged by millions of dollars during the last several years.
The attorneys are seeking class-action status.
Named as defendants in the suits are Allstate Indemnity Company, First Floridian Auto and Home Insurance Company (a subsidiary of Travelers), Geico, Nationwide Mutual Fire Insurance Company, Progressive Express Insurance Company and Twin City Fire Insurance Co. (a subsidiary of the Hartford Financial Services Group).
Under state law, motorists automatically receive a stacked policy unless they specifically opt out on a form they receive with their insurance applications and renewals.
Tami Torres of the Florida Department of Insurance said stacked insurance can be used only if a consumer owns more than one vehicle so "it appears" that anyone who owns one vehicle should opt out of the more expensive coverage.
Torres said the department will dispense that advice if a consumer asks but stressed it is up to insurance agents to explain the pros and cons of any coverage to their customers.