MAPFRE Alleges AAA Breached Long-Standing Exclusive Marketing Agreement

The largest auto insurer in Massachusetts, MAPFRE, is currently embroiled in a legal dispute with AAA Northeast. The insurer claims that AAA Northeast is breaching a 20-year joint marketing agreement (JMA) that is valued at approximately $200 million annually in premiums.

In a lawsuit filed in state court, MAPFRE alleges that AAA Northeast’s insurance agency has begun selling auto insurance policies from its affiliated insurer, Motor Club Insurance Co. (MCIC), to its auto club members. This action is occurring despite the ongoing exclusivity of the JMA with MAPFRE.

The JMA grants MAPFRE the exclusive rights to market and sell insurance to AAA Northeast members using the AAA Emblem, along with offering preferential or discounted pricing under Massachusetts’ group insurance law until December 31, 2026.

However, MAPFRE contends that AAA Northeast is attempting to undermine its relationship with Massachusetts consumers by improperly promoting and selling insurance through MCIC starting January 1, 2026—one full year before the agreement is set to expire. This comes after MAPFRE notified AAA Northeast of these violations and requested adherence to the agreement.

Since its inception in 2007, the JMA has proven lucrative for MAPFRE, generating over $200 million in premiums from AAA Northeast customers in 2025 alone. Under the terms of the agreement, MAPFRE compensates AAA with commissions and a profit-sharing bonus for every auto policy sold to AAA members by participating agents.

“The extensive history between the parties has been mutually beneficial, with MAPFRE enjoying exclusive rights and AAA Northeast receiving substantial compensation in return,” the lawsuit states. “Massachusetts consumers have benefited from this relationship, as AAA Northeast members have received excellent automobile insurance coverage through MAPFRE at a competitive price.”

While the JMA permits AAA Northeast to sell up to 50% of its business through other carriers, these carriers are prohibited from using the AAA Emblem or offering discounts or preferential pricing to AAA members.

AAA Northeast can terminate the JMA if MAPFRE enters into a group discount arrangement with any automobile club not affiliated with AAA or if MAPFRE’s AM Best rating falls below B+. Currently, MAPFRE holds an A (Excellent) rating from AM Best.

Documents related to the complaint reveal that MCIC has submitted discounted group auto insurance rates to the state insurance department. Initially, MCIC received approval for rates that included a 2% discount for AAA Northeast members. Following MAPFRE’s objections, MCIC refiled to remove the 2% discount but significantly reduced its rates by 67%-84%, effective January 1, 2026.

“For MCIC to offer any discount targeted at AAA Northeast members in 2026 would be a direct violation of the JMA, and this deeply reduced rate is a ‘discount’ in everything but name,” the lawsuit argues.

Furthermore, MAPFRE claims that AAA Northeast is violating the JMA by using the AAA Emblem on its website in connection with MCIC and by having its sales associates promote MCIC without mentioning MAPFRE.

“This entrance into the Massachusetts market is in direct breach of the JMA, as AAA Northeast cannot use its subsidiary, MCIC, to compete with MAPFRE, nor can it use the AAA Emblem to sell automobile insurance in Massachusetts under the JMA,” the lawsuit maintains.

MAPFRE is seeking damages and injunctive relief, asserting claims of breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, tortious interference with advantageous business relationships, and violations of Massachusetts’ consumer protection law (Chapter 93A), which prohibits unfair business practices.

As of now, AAA Northeast has not responded to requests for comment.

The largest auto insurer in Massachusetts, MAPFRE, is currently embroiled in a legal dispute with AAA Northeast. The insurer claims that AAA Northeast is breaching a 20-year joint marketing agreement (JMA) that is valued at approximately $200 million annually in premiums.

In a lawsuit filed in state court, MAPFRE alleges that AAA Northeast’s insurance agency has begun selling auto insurance policies from its affiliated insurer, Motor Club Insurance Co. (MCIC), to its auto club members. This action is occurring despite the ongoing exclusivity of the JMA with MAPFRE.

The JMA grants MAPFRE the exclusive rights to market and sell insurance to AAA Northeast members using the AAA Emblem, along with offering preferential or discounted pricing under Massachusetts’ group insurance law until December 31, 2026.

However, MAPFRE contends that AAA Northeast is attempting to undermine its relationship with Massachusetts consumers by improperly promoting and selling insurance through MCIC starting January 1, 2026—one full year before the agreement is set to expire. This comes after MAPFRE notified AAA Northeast of these violations and requested adherence to the agreement.

Since its inception in 2007, the JMA has proven lucrative for MAPFRE, generating over $200 million in premiums from AAA Northeast customers in 2025 alone. Under the terms of the agreement, MAPFRE compensates AAA with commissions and a profit-sharing bonus for every auto policy sold to AAA members by participating agents.

“The extensive history between the parties has been mutually beneficial, with MAPFRE enjoying exclusive rights and AAA Northeast receiving substantial compensation in return,” the lawsuit states. “Massachusetts consumers have benefited from this relationship, as AAA Northeast members have received excellent automobile insurance coverage through MAPFRE at a competitive price.”

While the JMA permits AAA Northeast to sell up to 50% of its business through other carriers, these carriers are prohibited from using the AAA Emblem or offering discounts or preferential pricing to AAA members.

AAA Northeast can terminate the JMA if MAPFRE enters into a group discount arrangement with any automobile club not affiliated with AAA or if MAPFRE’s AM Best rating falls below B+. Currently, MAPFRE holds an A (Excellent) rating from AM Best.

Documents related to the complaint reveal that MCIC has submitted discounted group auto insurance rates to the state insurance department. Initially, MCIC received approval for rates that included a 2% discount for AAA Northeast members. Following MAPFRE’s objections, MCIC refiled to remove the 2% discount but significantly reduced its rates by 67%-84%, effective January 1, 2026.

“For MCIC to offer any discount targeted at AAA Northeast members in 2026 would be a direct violation of the JMA, and this deeply reduced rate is a ‘discount’ in everything but name,” the lawsuit argues.

Furthermore, MAPFRE claims that AAA Northeast is violating the JMA by using the AAA Emblem on its website in connection with MCIC and by having its sales associates promote MCIC without mentioning MAPFRE.

“This entrance into the Massachusetts market is in direct breach of the JMA, as AAA Northeast cannot use its subsidiary, MCIC, to compete with MAPFRE, nor can it use the AAA Emblem to sell automobile insurance in Massachusetts under the JMA,” the lawsuit maintains.

MAPFRE is seeking damages and injunctive relief, asserting claims of breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, tortious interference with advantageous business relationships, and violations of Massachusetts’ consumer protection law (Chapter 93A), which prohibits unfair business practices.

As of now, AAA Northeast has not responded to requests for comment.