BOSTON (Legal Newsline) - Approximately $3 million in motorcycle insurance refunds has been sent to Massachusetts residents who were allegedly overcharged for insurance coverage, Massachusetts Attorney General Martha Coakley has announced.

The money, distributed as part of a settlement reached with Liberty Mutual Insurance Company in January, is part of Coakley's ongoing motorcycle insurance overcharge initiative.

"We are pleased that Liberty Mutual cooperated with our investigation and that policyholders are now receiving their refunds, particularly in this economy when every penny counts," Coakley said.

"We will continue to work to achieve more transparency in the auto insurance industry. We encourage consumers with questions about their policies to contact our Insurance & Financial Services Division."

Liberty Mutual is required by terms of the settlement to complete the process of issuing the refunds by May 1, with the average consumer receiving $334.

Funds of less than $250 will be distributed to 5,851 Massachusetts residents and 1,560 residents will receive refunds of between $250 and $499. Refunds of between $500-$999 will be sent to 1,136 residents while 740 will receive refunds of between $1,000-$9,200.

Consumers who are eligible for a refund must have purchased either comprehensive or collision coverage for a motorcycle between January 1, 20002 and March 30, 2009. Coakley alleged that Liberty Mutual overvalued motorcycles during this time for the purpose of calculating premiums.

As a result of an investigation, Coakley's office has also reached settlements with Safety Insurance Company, Plymouth Rock Assurance, Pilgrim Insurance Company, Metropolitan Property & Casualty, USAA, and Quincy Mutual to resolve similar allegations.

The seven settling insurers are expected to return $20 million to more than 50,000 consumers and pay the commonwealth more than $1 million.

Liberty Mutual is the first of the settling insurance companies to send affected policyholders refunds.