EXHIBIT 10.26

            VOID AFTER 5:00 P.M., EASTERN TIME, ON JULY 31, 2012

                        COMMON STOCK PURCHASE OPTION

THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE IN RELIANCE ON
EXEMPTIONS THEREFROM AND, THEREFORE, MAY NOT BE RESOLD UNLESS REGISTERED
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.  THIS OPTION HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR SALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE ACT.

GRANT DATE: July 31, 2002

                          THE COMMERCE GROUP, INC.

                         ACIC AGENT OPTION - GROWTH

                           Expiring July 31, 2012

No. ACIC-G-[   ]

      THE COMMERCE GROUP, INC., a Massachusetts corporation (the
"Company"), for value received, hereby certifies that [   (Club Name)   ]
(the "Named Agent"), or its permitted assigns (together with the Named
Agent, the "Holder"), shall be entitled to purchase from the Company up to
twenty-five thousand (25,000) duly authorized, validly issued, fully paid
and nonassessable shares (the "Option Shares") of the Company's common
stock, $.50 par value per share (the "Common Stock"), at the purchase price
per share of $49.50 as such price may be adjusted from time to time
pursuant to Section 7 hereof (the "Exercise Price"), at any time or from
time to time on or after July 31, 2007 (the "Confirmation Date") up to and
until 5:00 p.m., Eastern time, on July 31, 2012 or such later date
determined in accordance with Section 9.1 hereof (the "Expiration Date"),
all subject to the terms and conditions and adjustments set forth below in
this Option.

      The Named Agent is an agent of American Commerce Insurance Company, a
majority owned subsidiary of the Company ("ACIC"). This Option is being
granted to the Named Agent in consideration for the Named Agent placing
additional Qualifying Business (as hereinafter defined) with ACIC and to
provide an incentive for the Named Agent to maintain that additional
business with ACIC through the Measurement Date (as hereinafter defined).

      1.    Vesting and Termination of Option
            ---------------------------------

            1.1   The right of the Holder to exercise this Option is
contingent upon the volume of direct written premiums derived by ACIC from
additional Qualifying Business (as defined below) that the Named Agent
places and maintains with ACIC as set forth in Section 1.2 of this Option.
As used in this Option, the term "Qualifying Business" means private
passenger automobile and homeowner insurance for risks written outside of
Massachusetts.


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            1.2   Notwithstanding any other provision of this Option, this
Option shall be exercisable on or after the Confirmation Date if and only
if the average annual volume of direct written premiums from Qualifying
Business that Named Agent placed with ACIC during the five-year period
ending on the Measurement Date (the "Five-Year Average") is not less than
$[         ].  As used in this Option, the term "Measurement Date" means
June 30, 2007.

            1.3   In computing the Five-Year Average, the aggregate volume
of direct written premiums derived by the Company from Qualifying Business
placed by the Named Agent shall be computed in accordance with generally
accepted accounting principles, consistently applied.  The Company shall
send to the Named Agent no later than the Confirmation Date a certificate
signed by its Chief Financial Officer attesting to the Five-Year Average.
No action or proceeding to dispute the calculation of the Five-Year Average
may be instituted or maintained unless the Named Agent gives written notice
to the Company within thirty (30) days after the Confirmation Date.

            1.4   Notwithstanding any other provision of this Option, this
Option shall terminate and none of the Option Shares shall be purchasable
hereunder if, at any time during the five-year period ending on the
Measurement Date, the Named Agent does not permit ACIC to market private
passenger automobile and homeowner insurance in the Named Agent's Service
Area (as defined below) using the AAA Mark (as defined below).  As used in
this Option, "AAA Mark" shall mean the AAA emblem, meaning the letters
"AAA" in block form, enclosed within an oval or without an oval and as
otherwise described in the Emblem Regulations (as defined below).  "Service
Area" shall have the meaning defined in the Bylaws of The American
Automobile Association (Incorporated) ("AAA"), as the same may be amended,
supplemented or superceded from time to time.  "Emblem Regulations" shall
mean the Regulations Governing the Use of the Emblem and Other Trademarks
of AAA adopted by the AAA Board of Directors on July 8, 1992, as the same
may be amended, supplemented or superceded from time to time.

      2.    Exercise of Option
            ------------------

            2.1   Subject to the terms and conditions hereof, this Option
may be exercised in whole or in part to the extent provided in Section 1.2
of this Option, at any time or from time to time on or after the
Confirmation Date and up to and until the Expiration Date, by delivery to
the Company of this Option and the purchase form annexed hereto as Exhibit
A properly completed and duly executed.

            2.2   This Option may be exercised only by conversion into a
number of shares of Common Stock equal to (x) the number of Option Shares
specified in the purchase form minus (y) a number of Option Shares of
having a Market Value (determined in accordance with Section 6 below) equal
to the amount (the "Exercise Payment") that is the product of the then-
current Exercise Price multiplied by the number of Option Shares specified
in the purchase form.

            2.3   Upon and as of receipt by the Company of this Option and
a properly completed and duly executed purchase form, the Holder shall be
deemed to be the holder of record of the shares of Common Stock issuable
upon such exercise, notwithstanding that the stock transfer books of the
Company shall then be closed or that certificates representing such shares
of Common Stock shall not then actually be delivered to the Holder.
Certificates


<PAGE>  2


representing the shares so purchased shall be delivered to the Holder as
soon as practicable and in any event not more than twenty (20) business
days after exercise of this Option.  Any issuance of a certificate for
shares of Common Stock upon exercise of this Option shall be made without
charge to the Holder for any issuance tax in respect thereof or other cost
incurred by the Company in connection with such exercise and the related
issuance of shares of Option Shares.

            2.4   If the Option is exercised for less than the total number
of Option Shares evidenced by the Option, the Company shall, promptly after
presentation of the Option upon such exercise, execute and deliver a new
Option, dated the date of this Option, evidencing the rights of the Holder
to purchase the balance of the Option Shares purchasable hereunder upon the
same terms and conditions herein set forth.

      3.    Reservation of Shares
            ---------------------

      The Company shall, at all times from the date of original issuance of
the Option until its expiration, reserve for issuance and delivery upon
exercise of the Option the number of Option Shares as shall be required for
issuance and delivery upon exercise of the Option.  All Option Shares, upon
issuance, shall be validly authorized, issued and outstanding shares, fully
paid and nonassessable, and free of all liens, encumbrances and (except as
otherwise provided herein) restrictions thereon.  The Company shall take
all such actions as may be necessary to assure that all Option Shares may
be so issued without violation of any applicable law or governmental
regulation or any requirement of any domestic securities exchange upon
which shares of Option Shares may be listed (except for official notice of
issuance which shall be immediately delivered by the Company upon each such
issuance).  The Company shall not take any action which would cause the
number of authorized but unissued shares of Option Shares to be less than
the number of such shares required to be reserved hereunder for issuance
upon exercise of the Option.

      4.    Fractional Shares
            -----------------

      If the exercise of the Option would otherwise result in the issuance
of a fraction of a share, the Company shall instead of issuing any
fractional shares or scrip representing fractional shares pay to the Holder
an amount in cash equal to such fraction multiplied by the Market Value of
a share of Common Stock.

      5.    Market Value of Common Stock
            ----------------------------

      For purposes of this Agreement,

            (x)   the Market Value of the Common Stock shall equal an
      amount per share of Common Stock equal to the average closing price
      for the ten (10) trading days immediately preceding the date of
      exercise as reported (i) on the principal national securities
      exchange on which the Common Stock is traded or (ii) if the Common
      Stock is not traded on a national exchange, on The Nasdaq Stock
      Market ("Nasdaq"); or

            (y)   if the Common Stock is not so listed on a national
      securities exchange or quoted on Nasdaq, the Market Value of the
      Common Stock shall be an amount mutually agreed upon by the Company
      and the Holder or, if the Company and the Holder are unable to agree,
      by a nationally recognized investment banking firm selected by the
      Company and consented to by the Holder, such consent not to be
      unreasonably withheld.  Any fees or


<PAGE>  3


      expenses incurred in connection with the retention of an investment
      banking firm pursuant to this clause (y) shall be borne by the
      Company.

      6.    No Rights as Stockholder
            ------------------------

      This Option shall not entitle the Holder to any right as a
stockholder of the Company, either at law or in equity.  The rights of the
Holder are limited to those expressed in this Option or otherwise provided
to the Holder by law.

      7.    Price of Option Shares; Effect of Dividends on Common Stock
            -----------------------------------------------------------

            7.1   The number of shares of Common Stock for which this
Option may be exercised and the Exercise Price therefore shall be subject to
adjustment as follows:

            (a)   If the Company is recapitalized through the subdivision
      or combination of its outstanding shares of Common Stock into a
      larger or smaller number of shares, the number of shares of Common
      Stock for which this Option may be exercised shall be increased or
      reduced, as of the record date for such recapitalization, in the same
      proportion as the increase or decrease in the outstanding shares of
      Common Stock, and the Exercise Price shall be adjusted so that the
      aggregate amount payable for the purchase of all Option Shares
      issuable hereunder immediately after the record date for such
      recapitalization shall equal the aggregate amount so payable
      immediately before such record date.

            (b)   If the Company declares a dividend on Common Stock, or
      makes a distribution to holders of Common Stock, and such dividend or
      distribution is payable or made in Common Stock, the number of shares
      of Common Stock for which this Option may be exercised shall be
      increased, as of the record date for determining which holders of
      Common Stock shall be entitled to receive such dividend or
      distribution, in proportion to the increase in the number of
      outstanding shares (and shares of Common Stock issuable upon
      conversion of all such securities convertible into Common Stock) of
      Common Stock as a result of such dividend or distribution, and the
      Exercise Price shall be adjusted so that the aggregate amount payable
      for the purchase of all the Option Shares issuable hereunder
      immediately after the record date for such dividend or distribution
      shall equal the aggregate amount so payable immediately before such
      record date.

            (c)   If the Company declares a dividend on Common Stock (other
      than a dividend covered by subsection (b) above or a cash dividend
      declared in the ordinary course of business (a "Regular Cash
      Dividend")) or distributes to holders of its Common Stock, other than
      as part of its dissolution or liquidation or the winding up of its
      affairs, any cash (a "Special Cash Dividend") or any shares of its
      stock, any evidence of indebtedness or any other of its assets (other
      than Common Stock, a Regular Cash Dividend or a Special Cash
      Dividend) (an "Alternative Distribution"), the Exercise Price shall
      be reduced by an amount equal to the amount of the Special Cash
      Dividend per share or, if applicable, the value of the Alternative
      Distribution per share of Common Stock as determined in good faith by
      the Company's Board of Directors based upon a written opinion from a
      nationally recognized investment banking firm, selected by the
      Company, and taking into account, among other relevant factors,
      whether the Holder acquired any Purchase Rights


<PAGE>  4


      (as defined in Section 7 hereof) with respect to such dividend or
      distribution pursuant to the terms hereof.  The Company shall provide
      the Holder with written notice concerning a Special Cash Dividend or
      an Alternative Distribution at least ten (10) days prior to the
      record date therefore.

            (d)   No adjustment in the Exercise Price shall be required
      unless such adjustment would require an increase or decrease in the
      Exercise Price of at least one percent(1.0%); provided, however, that
      any adjustment which by reason of this Section 7.1(d) is not required
      to be made immediately shall be carried forward and taken into
      account at the time of exercise of this Option or any subsequent
      adjustment in the Exercise Price which, singly or in combination with
      any adjustment carried forward, is required to be made under this
      Section 7.

            (e)   If the event in anticipation of which an adjustment is
      made under subsection (a), (b), (c) or (d) above does not occur, then
      any adjustment in the Exercise Price or number of Option Shares
      issuable pursuant to this Option that was made in accordance with any
      such subsection shall be reversed as to reinstate, effective
      immediately prior to the record date for such anticipated event, the
      Exercise Price and number of Option Shares as were in effect at that
      time without giving effect to such event.

            7.2   If at any time or from time to time there is a capital
reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification or other change of the Common
Stock provided for in Section 7.1) or a merger or consolidation of the
Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation or
sale, provision shall be made so that the Holder shall thereafter be
entitled to receive, upon exercise of the Option, the number of shares of
stock or other securities or property of the Company, resulting from such
reorganization, merger or consolidation or sale, to which a holder of
Common Stock, or other securities deliverable upon the exercise of this
Option, would have been entitled on such reorganization, merger,
consolidation, or sale.  In any such case, appropriate adjustments shall be
made in the application of the provisions of this Section 7 (including
adjustment of the Exercise Price then in effect and number of shares
purchasable upon exercise of the Option) which shall be applicable after
such events; provided, however, that any such adjustment shall be made so
as to ensure that the provisions of this Section 7 applicable after such
events shall be as equivalent as may be practicable to the provisions of
this Section 7 applicable before such events.  In the event of any such
reorganization, merger, consolidation or sale, the corporation formed by
such consolidation or merger or the corporation which shall have acquired
the assets of the Company shall execute and deliver a supplement hereto to
the foregoing effect.

            7.3   If the Company shall, at any time on or after the
Confirmation Date and through and including the Expiration Date, dissolve,
liquidate or wind up its affairs, the Holder shall have the right to
exercise this Option, subject always to the other provisions of this Option
including without limitation Section 1.2.  Upon such exercise, the Holder
shall have the right to receive, in lieu of the Option Shares that the
Holder otherwise would have been entitled to receive, the same kind and
amount of assets as would have been issued, distributed or paid to the
Holder upon any such dissolution, liquidation or winding up with respect to
such shares of Common Stock of the Company had the Holder been the holder
of record, as of the date for


<PAGE>  5


determining those entitled to receive any such distribution, of the maximum
amount of Option Shares then acquirable under Section 1.2 of this Option.

            7.4   The Company shall retain a nationally recognized firm of
independent public accountants (which may be any such firm regularly
engaged by the Company) to make any computation required under this Section
7, and a certificate signed by such firm shall be conclusive evidence of
the correctness of any computation made under this Section 7.

            7.5   Whenever the number of Option Shares or the Exercise
Price shall be adjusted as required by the provisions of this Section 7,
the Company promptly shall file in the custody of its Secretary or an
Assistant Secretary, at its principal office, and furnish to each Holder
hereof a certificate prepared in accordance with Section 7.4 hereof,
showing the adjusted number of Option Shares and the Exercise Price and
setting forth in reasonable detail the circumstances requiring the
adjustment.

            7.6   If an event occurs which is similar in nature to the
events described in this Section 7, but is not expressly covered hereby,
the Board of Directors of the Company shall make or arrange for an
equitable adjustment to the number of Option Shares and the Exercise Price.

      8.    Purchase Rights
            ---------------

      If the Company shall, at any time on or after the Confirmation Date
and through and including the Expiration Date, grant, issue or sell any
option, convertible security or right to purchase stock, options,
securities or other property pro rata to the record Holders of Common Stock
(the "Purchase Rights"), then the Holder of this Option shall be entitled
to acquire, upon the terms applicable to such Purchase Rights, the
aggregate amount of Purchase Rights which such Holder could have acquired
if such Holder had held, immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no
such record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issue or sale of such Purchase
Rights, the number of Option Shares then acquirable upon the exercise of
this Option to the fullest extent permitted by the other provisions of this
Option including without limitation Section 1.2.

      9.    Extension of Term
            -----------------

            9.1   If the Expiration Date is a day on which federal or state
chartered banking institutions located in the Commonwealth of Massachusetts
are authorized by law to close, then this Option shall expire on the next
succeeding day that is not such a day.

            9.2   If, as of the Expiration Date, the Company is subject to
a binding agreement to effect a reorganization, merger or consolidation of
the Company with or into another corporation, or the sale of all or
substantially all of the Company's properties and assets to any other
person or entity, but such contemplated transaction has not yet been
effectuated, the exercise period of the Option shall be extended until such
time as the pending transaction is actually consummated; provided, however,
that in the event that such reorganization, merger, consolidation or sale
shall fail to be consummated, the exercise period of the Option shall
terminate.


<PAGE>  6


      10.   Notices to Holder
            -----------------

      If, at any time on or after the Confirmation Date and through and
including the Expiration Date, (i) the Company shall propose to pay any
dividends or make any distribution upon the Common Stock, other than a
Regular Cash Dividend (as defined in Section 7.1 of this Option) or (ii)
the Company shall offer generally to the holders of Common Stock any
Purchase Right (as defined in Section 7 of this Option) or (iii) there
shall be any (or any vote regarding any) proposed capital reorganization of
the Company in which the Company is not the surviving entity,
recapitalization of the capital stock of the Company, consolidation or
merger of the Company with or into another corporation, sale, lease or
other transfer of all or substantially all of the property and assets of
the Company, or voluntary or involuntary dissolution, liquidation or
winding up of the Company, then in such event, the Company shall cause to
be deposited with a nationally recognized air courier, addressed to the
Holder hereof at the address appearing on the records of the Company at
least twenty (20) days prior to the relevant date described below (or the
longest period as is reasonably possible if twenty (20) days is not
reasonably possible, but in no event less than ten (10) days, a notice
containing a description of the proposed action and stating the date or
expected date on which a record of the Company's stockholders is to be
taken for the purpose of any such dividend, distribution of rights, or such
reclassification, reorganization, consolidation, merger, conveyance, lease
or transfer, dissolution, liquidation or winding up is to take place and
the date or expected date, if any is to be fixed, as of which the holders
of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such event.

      11.   Restrictions on Transfer
            ------------------------

            11.1  Prior to the Confirmation Date, neither this Option nor
any future interest in the Option Shares or any other securities issuable
pursuant to this Option ("Other Securities") may be sold, pledged or
otherwise transferred (collectively, a "transfer") to any person or entity
without the Company's prior written consent, which consent may be given or
withheld in the Company's sole discretion.

            11.2  It is the intention of the Company and the Named Agent
that the Option Shares and any Other Securities issued upon an exercise of
this Option will be freely transferable by the Holder without registration
under the Securities Act of 1933 (the "Securities Act") or any applicable
state securities or "blue sky" laws.  The Company shall, if requested by
the Holder prior to a proposed exercise of this Option, either (i) provide
to the Holder an opinion of counsel, in form and substance reasonably
satisfactory to the Company, to the effect that the Holder's transfer of
the Option Shares or Other Securities (a) would be exempt from the
registration requirements of the Securities Act and (b) would not violate
any applicable state or other jurisdiction's securities or "blue sky" laws
or (ii) if the Company is unable to deliver such an opinion, cause the
issuance of Option Shares or Other Securities to be registered under the
Securities Act.

            11.3  Subject to the transfer conditions described in this
Section 11, this Option and all rights hereunder are freely transferable,
in whole or in part, without restriction by the Company or charge to the
Holder, upon surrender of this Option to the Company.


<PAGE>  7


      12.   Company Books
            -------------

      The Company shall not close its books against the transfer of this
Option or of any share of Option Shares issued or issuable upon the
exercise of this Option in any manner which interferes with the timely
exercise of this Option.  The Company shall from time to time as may be
necessary use all commercially reasonable efforts to assure that the par
value per share of the unissued Option Shares acquirable upon exercise of
this Option is at all times equal to or less than the Exercise Price then
in effect.

      13.   Conditional Exercise
            --------------------

      Notwithstanding any other provision hereof, if an exercise of any
portion of this Option is to be made in connection with the reorganization,
merger, consolidation or sale of the Company (as described in Section 7.2),
the exercise of any portion of this Option may, at the election of the
Holder, be conditioned upon the consummation of the reorganization, merger,
consolidation or sale of the Company, in which case such exercise shall not
be deemed to be effective until the consummation of such transaction.

      14.   Amendment
            ---------

      An amendment of this Option shall be effective if in writing signed
by the Company and the Holder hereof.

      15.   Governing Law; Jurisdiction and Venue
            -------------------------------------

      This Option shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts without regard to the
conflict of laws provisions thereof.  Exclusive jurisdiction and venue for
any dispute arising under this Option will be in an appropriate federal or
state court in the Commonwealth of Massachusetts.


                [Remainder of Page Intentionally Left Blank]


<PAGE>  8


      IN WITNESS WHEREOF, the Company has executed this Agreement as of
July 31, 2002.

                                       THE COMMERCE GROUP, INC.


                                       By:  ___________________________
                                       Its:

[CORPORATE
 SEAL]


ACCEPTED AND AGREED TO:

[CLUB'S NAME]


By:  ___________________________________
     Its duly authorized:

     Name:  ____________________________


<PAGE>  9


           Exhibit 10.26
                                                                  To Option

                            ELECTION TO PURCHASE

      The undersigned hereby elects to exercise this Option and to purchase
________________ shares of The Commerce Group, Inc. Common Stock issuable
upon the exercise of this Option, and requests that certificates for such
shares shall be issued in the name of:

                      _________________________________
                                   (Name)

                      _________________________________
                                  (Address)

                      _________________________________
              (United States Social Security or other taxpayer
                      identifying number, if applicable)

and, if different from above, be delivered to:

                      ________________________________
                                   (Name)

                      ________________________________
                                  (Address)

and, if the number of Option Shares specified above is not all of the
Option Shares issuable upon exercise of this Option, that a Option to
purchase the balance of such Option Shares be registered in the name of,
and delivered to, the undersigned at the address stated below.

Dated:  ______________, _____

Name of Registered Owner:  ______________________

Address:  _______________________________________

Signature:  _____________________________________


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