DELAWARE - Liberty Mutual has paid a $300,000 penalty following a Delaware Department of Insurance investigation into misleading advertising practices. According to the Delaware Department of Insurance, the payment covers three member companies and includes an additional $200,000 penalty if the companies do not correct the identified issues.
The Department’s review found that the companies advertised insurance discounts that were not available to consumers in Delaware. Investigators documented 39,806 instances of false or misleading information between January 1, 2021, and July 31, 2023.
According to the Department, among the findings were 31,696 cases where “claims free” discounts were listed on homeowners insurance declaration pages, despite those discounts not being offered in the state. Officials say in another 8,110 instances, the companies indicated that auto insurance discounts were available for safety features such as adaptive cruise control, lane departure warning or collision preparation systems, though no such discounts were applied to Delaware policies.
The companies involved are Liberty Insurance Corporation, Liberty Mutual Personal Insurance Company and LM Insurance Corporation, which collectively write more than $59.7 million in premiums in Delaware.
The Delaware Department of Insurance noted that this is not the first time Liberty Mutual companies have been investigated for similar conduct. A previous examination of LM General Insurance Company and Liberty Mutual Fire Insurance Company, covering January 1, 2018, through March 31, 2021, found nearly 35,000 instances of false advertising and other violations. Those companies each paid a $150,000 penalty. Failure to comply with corrective orders from that earlier investigation resulted in an additional examination.
Penalties are paid into the State of Delaware’s General Fund.