Additional penalties possible if company compliance does not improve

After months of investigation, the Delaware Department of Insurance announced that Liberty Mutual has paid a penalty of $300,000 across three member companies, with an express stipulation that an additional $200,000 must be paid if conduct is not immediately remedied. The primary activities under review were the companies’ advertisement of potential premium discounts to automobile and homeowners’ insurance consumers despite not offering such discounts in Delaware. It is not the first time the company has been investigated for this issue.

“When shopping for insurance coverage, Delawareans already have so much to think about, especially in this economy. Our team is dedicated to uncovering misleading advertising and other misrepresentations that could lead to consumers choosing the wrong coverage for their needs, or their wallets,” said Insurance Commissioner Trinidad Navarro. “We have seen this problem before, and we are committed to ensuring it is corrected.”

39,806 instances of false information and advertising were uncovered during the examination of the companies. In 31,696 instances, the company listed a “claims free” discount on homeowners insurance declaration pages, when no such discount was offered in Delaware. In 8,110 cases Liberty companies indicated auto insurance consumers could access safety discounts if the consumers’ vehicle uses adaptive cruise control, lane departure warning, or collision preparation systems – but they offered no such discounts on Delaware policies.

The companies, Liberty Insurance Corporation, Liberty Mutual Personal Insurance Company, and LM Insurance Corporation write more than $59.7 Million in premium in Delaware. The examination reviewed relevant data from January 1, 2021 to July 31, 2023.

In the past, investigations of LM General Insurance Company and Liberty Mutual Fire Insurance Company from January 1, 2018 through March 31, 2021 encountered nearly 35,000 instances of false information and advertising, as well as additional violations of the Insurance Code. The companies each paid $150,000 in penalty, but their noncompliance with orders to correct the issue resulted in an additional examination.

Penalties are paid to the State’s General Fund.

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