Peabody insurance agency to pay $5.2 million in restitution to small business clients

Jan. 31--A Peabody-based insurance agency was ordered on Thursday to pay out nearly $5.2 million in restitution for overcharging its clients, made up of primarily small business owners.

After a 22-day trial and subsequent appeal at Suffolk Superior Court, a judge ordered the Kilgore Insurance Agency -- including agent Andrew W. Crowther, Jr. and owners Cyrus and Jeffrey Kilgore -- to pay more than $5 million in restitution to clients who were overcharged as part of an "orchestrated scheme," according to the office of Attorney General Maura Healey.

"Kilgore Insurance and its owners orchestrated a scheme to charge consumers millions in undisclosed, excessive, and illegal agency fees," Healey said in a statement. "We are pleased that with this action, overcharged consumers will receive restitution."

The Peabody-based insurer focuses on various kinds of insurance coverage, including cars, life, business and commercial. Its website boasts Kilgore as a family-run business for more than 70 years.

The trial court found that the average hidden agency fee charged by Kilgore Insurance was $5,471, or 47 percent of the insurance policy premium. Standard compensation, according to Healey's office, is closer to 10 percent for insurance agents.

An investigation found that Kilgore Insurance hid fees by "whiting out" the true premium cost and then typing in an inflated number, and omitting documents that disclose the real costs of the insurance premium, according to Healey's office.

Nearly 100 businesses were impacted in the scheme, Healey's office said in a statement.

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