This class action addresses rises in insurance rebuilding cost evaluations on homeowners’ policies issued by Amica Mutual Insurance Company. The complaint alleges that the coverage under an additional endorsement on Amica policies was adjusted too upwards when the policy was renewed, which the complaint claims is a breach of contract as well as a breach of the implied covenants of good faith and fair dealing.
The class for this action is all persons who own or have owned Amica homeowners’ policies containing the endorsement at issue in this case, from February 2010 to the present.
Plaintiff Peter A. Gottlieb insured his Massachusetts home with Amica. The endorsement in question was one he’d taken out for a Specified Additional Amount of Insurance, from March 10, 2015 to March 10, 2016, which provides for an extra 30% of coverage.
The complaint quotes the endorsement as providing an additional amount of coverage if the homeowner has allowed the company “to adjust the Coverage A Limit of Liability and premium in accordance with …[t]he property evaluations we make; and … [a] increases in inflation; and … [n]otified us, within 30 days of completion, of any improvement, alterations or conditions to the building insured under Coverage A which increase the replacement cost of the building by 5% or more…”
In other words, the Limit of Liability, or the value covered, is adjusted based on (a) property evaluations made by Amica, (b) increases in inflation, or (c) alterations to the property.
Between March 2015 and March 2016, Amica determined that his coverage on his home was $311,000. Just before the policy was due to be renewed, Amica sent Gottlieb a letter stating that his coverage for the upcoming policy year would be $321,000. The complaint points out that the additional $10,000 was an increase of 3.2%, which naturally would increase the premium.
When Gottlieb wrote to Amica and asked for the reason for this increase, Amica refused to reveal what data it used to calculate this increase.
The complaint points out that the Consumer Price Index (CPI) rose by only 0.7% in 2015.
It also obtained figures from the Insurance Services Office (ISO) that “is a subsidiary of Verisk Analytics that collects and sells data about property-casualty insurance risks to insurers.” Its 360Value for Personal Property, which helps insurers determine replacement costs, says that, from April 2015 to April 2016, “overall reconstruction costs increased 1.6%” in the US. The ISO’s state-specific data showed increases for Massachusetts between spring 2015 and spring 2016 as ranging by area from 1.5% to 1.99%.
These figures are below Amica’s 3.2%. According to the complaint, the increase cannot therefore be attributed to the rate of inflation. As to the other possible factors—evaluations or improvements—the complaint states that Amica has made no new evaluations and Gottlieb has made no improvements.
The complaint therefore alleges that the rise in the covered amount is unjustified, and the corresponding rise in premiums is an overcharge.
Article Type: LawsuitTopic: Insurance
Most Recent Case Event
Amica Mutual Insurance Co. Premium Increases Complaint
March 12, 2020
This class action addresses rises in insurance rebuilding cost evaluations on homeowners’ policies issued by Amica Mutual Insurance Company. The complaint alleges that the coverage under an additional endorsement on Amica policies was adjusted too upwards when the policy was renewed, which the complaint claims is a breach of contract as well as a breach of the implied covenants of good faith and fair dealing.
Amica Mutual Insurance Co. Coverage Amount Increases ComplaintCase Event History
Amica Mutual Insurance Co. Premium Increases Complaint
March 12, 2020
This class action addresses rises in insurance rebuilding cost evaluations on homeowners’ policies issued by Amica Mutual Insurance Company. The complaint alleges that the coverage under an additional endorsement on Amica policies was adjusted too upwards when the policy was renewed, which the complaint claims is a breach of contract as well as a breach of the implied covenants of good faith and fair dealing.
Amica Mutual Insurance Co. Coverage Amount Increases Complaint