RIVERSIDE, Calif. (CN) — Liberty Mutual will pay $925,000 to settle district attorneys’ lawsuit accusing it of advertising “accident forgiveness” auto insurance that is not available in California.
District attorneys in Los Angeles, Riverside and San Diego counties sued the insurer in Riverside Superior Court for unfair competition and false advertising. Superior Court Judge John Molloy signed the stipulated final judgment on Wednesday.
Boston-based Liberty Mutual’s nationwide TV ad campaign for accident forgiveness insurance reached 70 to 80 percent of California households, according to the company’s own estimates, the San Diego County attorney said in a statement Thursday. But accident forgiveness auto insurance was prohibited in California in 1988, by Proposition 103.
Liberty Mutual failed to disclose that save for a small disclaimer briefly visible at the bottom of the TV ads, which was “insufficient to adequately alert viewers,” the district attorney said.
Liberty Mutual did not have to admit liability.
The $925,000 settlement includes $95,000 for investigative costs and civil penalties of $830,000. Each district attorney’s office will receive one-third of the settlement.
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