AG sues Kilgore Insurance Agency

PEABODY – A Peabody-based insurance agency is being sued by Attorney General Martha Coakley’s office for allegedly overcharging customers.Kilgore Insurance Agency and its agents Andrew W. Crowther Jr. and Kathleen J. Burke, and its owners Cyrus A. Kilgore and Jeffrey B. Kilgore are named in the suit.The complaint, filed in Suffolk Superior Court, alleges the agency bilked customers of more than $3.4 million by billing them for undisclosed agency fees and misrepresenting the fees as insurance premiums. According to the suit, the agency charged undisclosed fees that were often 50 percent to 100 percent of the actual premiums charged by insurance companies instead of normal agent commissions on such policies, which are approximately 10 percent.Calls to Kilgore Insurance Agency were not returned Wednesday, but a press release from Coakley’s office alleges the agency charged undisclosed fees and even forged customer signatures on some documents.”We allege in our complaint that these defendants have repeatedly taken advantage of their customers – many of which are small, family-owned local businesses – by hiding their undisclosed and excessive agency fees,” Coakley said. “Particularly in this difficult economy, we must ensure that our businesses, especially small businesses, are not taken advantage of and continue to grow and thrive.”In the suit, Coakley’s office alleges the agency and its principals routinely told customers that Kilgore Insurance Agency had “shopped” the insurance market and the insurance policy and “premium” being recommended was the cheapest or only insurance policy available.”At no time would the defendants inform customers that this “premium” figure included a large agency fee for the defendants,” the press release read. “In order to conceal the undisclosed agency fees, the defendants would routinely “white out” premium figures on actual insurance policies and replace those premium figures with inflated numbers that included the defendants’ undisclosed agency fees, the complaint asserts.”According to the complaint, the agency allegedly forged their customers’ signatures on documents that revealed an insurance policy’s true premium including affidavits that were filed with the Massachusetts Division of Insurance.The complaint also alleges the defendants secured premium financing agreements for customers that deceptively included the defendants’ undisclosed agency fees as insurance premiums and altered the financing agreements to conceal their undisclosed agency fees. On certain insurance policies, the defendants allegedly charged undisclosed agency fees and double-dipped by accepting commissions paid to the defendants by insurance companies.The Attorney General’s complaint seeks restitution, injunctive relief, civil penalties and attorney’s fees.