Liberty Mutual fined $300K for misleading insurance ads in Delaware

Delaware insurance regulators have fined Liberty Mutual $300,000 following an investigation that revealed tens of thousands of misleading advertisements promising discounts that weren’t actually available to state residents.

The Delaware Department of Insurance announced the penalty after a months-long examination of three Liberty Mutual member companies: Liberty Insurance Corporation, Liberty Mutual Personal Insurance Company, and LM Insurance Corporation.

In addition to the $300,000 fine, the companies face a conditional penalty of $200,000 if the misleading practices are not immediately corrected.

The investigation uncovered 39,806 instances of false or deceptive advertising between January 1, 2021, and July 31, 2023.

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Most notably, Liberty Mutual advertised “claims-free” discounts on homeowners insurance declaration pages—despite not offering that discount in Delaware.

Similarly, the company promoted auto insurance discounts for vehicles equipped with advanced safety features like adaptive cruise control and lane departure warning systems, though those discounts were not available on any Delaware policies.

“When shopping for insurance coverage, Delawareans already have so much to think about, especially in this economy. Our team is dedicated to uncovering misleading advertising and other misrepresentations that could lead to consumers choosing the wrong coverage for their needs, or their wallets,” said Insurance Commissioner Trinidad Navarro. “We have seen this problem before, and we are committed to ensuring it is corrected.”

The three Liberty Mutual companies currently write more than $59.7 million in insurance premiums in Delaware.

This is not the first time the insurer has faced scrutiny over similar practices. A prior investigation into related Liberty Mutual entities found nearly 35,000 instances of misinformation between 2018 and 2021. At the time, those companies were fined $150,000 each, but continued noncompliance triggered the most recent examination.

All penalties from the current investigation will be paid into Delaware’s General Fund.