Progressive Defends Online Quoting and Comparison Rating Application
MAYFIELD VILLAGE, Ohio — May 6, 2008 — The Massachusetts Association of Insurance Agents (MAIA) today issued a news release that included inaccurate or misleading information about Progressive's Web site and its Massachusetts private passenger auto insurance product that the Progressive Group of Insurance Companies would like to correct and clarify.
"It's unfortunate that the Massachusetts Association of Insurance Agents didn't contact us about their concerns before issuing an inaccurate news release," said John Barbagallo, Agency Operations, Progressive. "We are committed to providing products and services to independent agents to help them compete effectively in the market and to help them grow. Our Massachusetts product is extremely competitively priced, and, while it's not available to independent agents in the state yet, we have committed to making it available to them next year."
A summary of the information in the association's news release, followed by the correction or clarification, follows:
| MAIA news release says: |
Progressive clarification/correction: |
| Progressive's rates appear to beat competitors', but leave coverage gaps. |
The rate comparisons we offer are always apples-to-apples. To the extent possible, we include the identical coverages and options when generating competitor rates as we use in developing the Progressive quote. |
| The Progressive Web site asks questions not allowed in rating such as Social Security Number, gender, recent military service and marital status. |
We ask similar questions in Massachusetts as we do in other states in which we sell auto insurance. However, in determining a driver’s premium, we only use information allowed by Massachusetts regulations. |
| The quote process says Progressive obtains credit reports and credit scoring information. |
This is standard disclosure language used in other states where Progressive uses credit information. Because financial information from credit reports is not allowed in setting rates in Massachusetts, we do not use it. We are having this standard disclosure language removed from the Web site. |
| The "Basic Coverage" quote would not provide coverage anywhere other than on a public road within Massachusetts. |
Progressive agrees that Compulsory Bodily Injury Coverage is not adequate for many drivers. For that reason, Progressive will not sell this coverage without Optional Bodily Injury through our Web site. All quotes provided on progressive.com include two parts of Bodily Injury coverage — the mandatory part and the optional part — and this is clearly spelled out on the site. If a customer insists on just buying Basic Coverage, we ask that they call us so that we can counsel them to be certain they understand the limitations of Basic Coverage. |
| The Personal Injury Protection (PIP) deductible is $8,000. |
If customers indicate they have existing health insurance, we present a PIP deductible of $8,000. However, the deductible is in a clearly marked pick list that the customer can use to choose any level of deductible they desire, including no deductible. We believe that customers should buy the coverage they need — no more and no less — and work hard to present all the information they need to make appropriate choices. |
| Quotes include a $500 deductible for glass coverage. |
Progressive offers glass repair at no charge to the customer. We present a $500 deductible for glass replacement coverage, because this is typically much more economical. Customers can reduce the deductible if they choose. All of the available options and their costs are clearly displayed during the quoting process. |
| Progressive does not offer 12-month policies. |
Progressive generally offers 6-month policies, but in compliance with state regulations, 12-month policies are available to Massachusetts drivers. While most customers seem happy with a 6-month policy term, many have taken advantage of the availability of 12-month policies. |
| Comparative quotes are inaccurate and use a policy term of 6 months. |
The comparison rates offered by Progressive are accurate and are based on the filed rates of the competitor companies. Because our standard policy is 6 months, we present what a customer would pay for 6 months of coverage from the competing company. To calculate the 6-month premium, we simply divide the 12-month policy premium in half. |
| The Progressive quote does not appear to include merit rating information. |
Progressive uses driving history as disclosed by the customer to generate our quoted premiums. If the customer indicates they would like to buy that policy, we verify the driving information using consumer reports as disclosed on the site. Each violation or incident is then shown to the customer who, if necessary, can dispute the validity of any incident. In addition, all policy documents clearly show all incidents and violations used in setting the rate and the source where information on that violation/incident was obtained. |
| Progressive does not offer a waiver of deductible endorsement. |
Progressive does offer a waiver of deductible endorsement. |
| At Progressive's Web site, you get the impression you're getting an actual quote until a notice displays that the rate may vary or you may not be offered a quote... |
At our Web site, you get a quote on a Progressive policy. If you wish, you may also receive comparison rates of competitors. The notice referred to applies to the comparison rates we offer. Since other companies do not necessarily offer rates to all customers, we cannot guarantee that we can offer comparison quotes from each company to every customer. Further, if we do offer a comparison rate of a competitor, we cannot guarantee that the competitor will sell the policy or sell the policy at their filed rate. |
Barbagallo said: "As the largest seller of auto insurance through independent agents in the U.S., we recognize that many consumers prefer the objective, in-person counsel independent agents offer. And, we recognize that a lot of consumers are comfortable shopping for and buying insurance online. The good news is that there are choices in how to buy available to Massachusetts drivers."
About Progressive
The Progressive Group of Insurance Companies, in business since 1937, is the country's third largest auto insurance group and largest seller of motorcycle and personal watercraft policies based on premiums written, and is a market leader in commercial auto insurance.
Progressive is committed to becoming consumers' #1 choice for auto insurance by providing competitive rates and products that meet drivers' needs throughout their lifetimes, superior online and in-person customer service, and best-in-class, 24-hour claims service, including its concierge level of claims service available at service centers located in major metropolitan areas throughout the United States.
Progressive companies offer consumers choices in how to shop for, buy and manage their auto insurance policies. Progressive offers its products, including personal and commercial auto, motorcycle, boat and recreational vehicle insurance, through more than 30,000 independent insurance agencies throughout the U.S. and online and by phone directly from the Company. Private passenger auto products and prices are different when purchased directly from Progressive or through independent agencies. To find an agent or to get a quote, go to www.progressive.com.
The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR.
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