Business & Tech
'Accident Forgiveness'? Not in CA. Liberty Mutual Settles Suit with County Over Misleading Ads
Liberty Mutual did not admit any wrongdoing under the terms of the $1.85 million settlement.
RIVERSIDE COUNTY, CA - A lawsuit against Liberty Mutual alleging false advertising and other violations of state consumer protection regulations was settled in Riverside County Superior Court for $1.85 million, it was announced Thursday.
The Riverside County District Attorney's Office, along with D.A.'s offices in Los Angeles and San Diego counties, filed the civil complaint against Boston-based Liberty Mutual Group and its subsidiary, Liberty Mutual Fire Insurance Co., earlier this week following a months-long investigation.
Liberty Mutual did not admit any wrongdoing under the terms of the settlement, which Riverside County Superior Court John Molloy certified Wednesday.
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According to the Riverside County District Attorney's Office, in an advertising campaign initiated in 2014, Liberty Mutual highlighted an "accident forgiveness" provision in its auto insurance policies without disclosing that such benefits are not available in California under Proposition 103. The 1988 voter-approved ballot measure established criteria for setting rates.
According to prosecutors, about 70-80 percent of California households have been exposed to the Liberty Mutual insurance advertisements over the last two-plus years.
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Prosecutors alleged that Liberty Mutual breached the state's Unfair Competition and false advertising laws by running the ads without caveats stating that California consumers wouldn't be entitled to accident forgiveness benefits.
The injunction issued under the legal settlement specifies that from this point on, Liberty Mutual will include "clear and conspicuous" disclosures that accident forgiveness is not available in the Golden State, according to D.A.'s office spokesman John Hall.
The company agreed to pay $925,000 to settle the lawsuit, as well as disburse $830,000 in civil penalties and $95,000 to cover investigative expenses. Riverside County will receive $308,000 of the total.
– By City News Service / Image via Shutterstock.
