Mercury Insurance’s 20-year Legal Battle with California Settles for $41 Million

The largest property and casualty insurance penalty and interest payment in the California’s history has been levied and Mercury Insurance’s 20-year-long battle with California is now over. Under the terms, Mercury will pay the state more than $41 million. The decades-long legal dispute was over extra fees that Mercury charged to its customers.

The settlement came after the state Supreme Court last month declined to hear the company’s appeal from a lower court decision. The department said Mercury allowed its auto insurance agents to charge up to $150 in unapproved fees on top of state-approved premiums. The company collected more than $27 million in fees on more than 180,000 transactions from 1999 to 2004, the department said, though Mercury argued that the costs were legal broker fees.

A Orange County judge overturned the fine in 2016, but the state’s Fourth District Court of Appeal ruled that Mercury agents were not brokers and as a result could not charge the fees.

“Mercury’s illegal actions misled consumers and undercut competitors, which gave them an unfair advantage in the insurance marketplace,” the California Insurance Commission said in a statement.

Mercury said it “decided to settle this case so we can move forward” and that the settlement was in the best interests of its customers, employees and other stakeholders.

Whether arguing with the state or another business, legal disputes are EVERYWHERE. And when those nasty things affect YOU and YOUR business including landlord/tenant matters, contract issues, nuisance ADA claims and even collections, call in your good guy business litigator, Dean Sperling, who will work to resolve YOUR matter with YOUR best interests in mind!

More on the case: