The Delaware Department of Insurance announced on Monday 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 penalty comes after the department spent months investigating the company over allegations it advertised potential premium discounts for automobile and homeowner’s insurance despite not offering those discounts in Delaware. Officials said it is not the first time the company has been investigated for the 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,” Insurance Commissioner Trinidad Navarro said. “We have seen this problem before, and we are committed to ensuring it is corrected.”
The department found 39,806 instances of false information and advertising during its investigation, with nearly 32,000 of those instances coming from a “claims free” discount on homeowners insurance declaration pages while no such discount was offered in Delaware. In 8,110 cases, Liberty companies claimed consumers purchasing auto insurance could receive safety discounts for using adaptive cruise control, lane departure warning or collision preparation systems, even though those discounts were not offered on Delaware policies.
Liberty Insurance Corporation, Liberty Mutual Personal Insurance Company and LM Insurance Corporation write nearly $60 million in premiums in the state. Insurance department investigators looked at data from Jan. 1, 2021 to July 31, 2023.
Previous investigations into LM General Insurance Company and Liberty Mutual Fire Insurance Company found nearly 35,000 instances of false information and advertising, as well as additional violations of the insurance code, and resulted in $300,000 in penalties. However, officials said Liberty Mutual’s failure to correct the issues resulted in further investigation.