Massachusetts-based Kilgore Insurance Agency has been ordered to pay out nearly $5.2 million to its small business customers for overcharging them for insurance products
Judge Robert Ullman in Suffolk County, MA ruled that Kilgore Insurance Agency, insurance agent Andrew W. Crowther, Jr., and agency owners Cyrus Kilgore and Jeffrey Kilgore were guilty of padding insurance premiums with significant amounts of hidden ‘agency fees.’
The average hidden agency fee charged by the defendants was $5,471, or 47% of the insurance policy premium, with some fees reaching as high as 462% of the premium. Standard compensation for insurance agents selling these policies is around 10%.
According to a statement from Office of Massachusetts Attorney General Maura Healey, an investigation found that the company hid extra fees from clients in a variety of ways, including by ‘whiting out’ the actual premium figure on insurance policies and typing in an inflated figure that included the undisclosed agency fee. The company also withheld from clients the last page of premium finance agreements, where the true premium, as set by the insurer, is typically disclosed.
Nearly 100 clients were negatively impacted by the Kilgore agency’s schemes.
“Kilgore Insurance and its owners orchestrated a scheme to charge consumers millions in undisclosed, excessive, and illegal agency fees,” said Healy. “We are pleased that with this action, overcharged consumers will receive restitution.”
