Beginning in 2014, the Boston-based company launched the nationwide television ad campaign, which has been estimated to have reached up to 80 percent of the households in California. The commercials were focused on the “accident forgiveness” program, which protects drivers for having an insurance rate increase in the case they were involved in an at-fault collision. Although these commercials reached California homes, California consumer protection laws prohibit accident forgiveness programs from being offered in California.
Prosecutors accused the company of having only a three to four-second disclaimer, which used small type and that was “obscure” when California law requires all advertising is clearly disclosed. “California consumers rightfully expect clear and accurate advertising about what is and is not contained in the automobile insurance policies offered to them,” said District Attorney Lacey.
The terms of the judgment include that Liberty Mutual will be subject to an injunction requiring full compliance with the state law with its accident forgiveness advertising, including a clear disclosure that these programs are not available in California. The settlement will be split among the three counties.
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