California Orders Insurers to Refund Premiums to Drivers and Businesses Due to COVID-19.
California Insurance Commissioner Ricardo Lara on Monday ordered insurers to refund insurance premiums. Both consumers and businesses. This is intended to provide financial relief during the COVID-19 emergency.
The commissioner’s newsletter covers premiums paid for at least the months of March and April. Including May if “quarantine” restrictions continue. This is at least for six different lines of insurance: private passenger car, commercial vehicle; workers compensation; multi commercial risk; commercial liability; Medical negligence. And any other line of insurance where the risk of loss has decreased. That is a result of the COVID-19 pandemic.
“With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their current risk of accident or loss, “Lara said in a statement. “Today’s mandatory action will put money back in people’s pockets when they need it most.”
The commissioner’s bulletin requires, as soon as possible, that insurance companies provide a premium credit. It must be executed no later than August. Deduction, return of premium, or another appropriate premium adjustment. Lara has already requested at least a 60-day grace period for policyholders to pay their premiums.
Numerous auto insurance companies have recently announced voluntary premium refunds to drivers. The newsletter extends these personal private auto policy reductions to more companies. And it adds business lines while monitoring insurance companies’ compliance with California consumer protection laws. So that refunds are not discriminatory or inappropriate.
A refund of the premium will not require prior approval from the California Department of Insurance. This if the insurance company follows certain methods described in the bulletin. Such as using an average percentage based on the estimated change in risk or exposure. Consumers will also have the opportunity to provide their actual or estimated individual experience to their insurance company.
Lara also ordered insurance companies to inform the department about the movements. All premium refunds that were issued or expect to be issued within 60 days. The intent is to provide oversight and ensure that companies comply with the bulletin.
There are other measures related to the Coronavirus outbreak. Those that have been taken by the commissioner and the department include:
- Request a 60-day grace period for consumers and businesses to pay insurance premiums.
- Extend the deadlines for insurance claims. The deadline is up to 90 days after the state or other “state of emergency” related to COVID-19 has ended.
- Maintain current car insurance for those with an expired license and / or car registration.
- Extension of personal car coverage for drivers of Delivery for essential California businesses.
- Eliminate cost-sharing for COVID-19 screenings and screenings.
- Remind insurance companies that workers’ compensation insurance applies regardless of a worker’s immigration status.
- Urge Californians who do not have insurance to get one to protect their health.
- Lead health insurance companies to provide greater telehealth access to consumers.
- Instruct health insurance companies to submit emergency plans on prescription drugs and access to health.
List of Auto Insurers Offering Discounts in Effort to Alleviate the Coronavirus Situation
The group of property and casualty insurers offering discounts continues to grow. It happens in auto insurance premiums. They acknowledge that policyholders drive less during the coronavirus crisis. This now includes all the major auto insurers.
For example, State Farm y Nationwide ringing relief, they joined the top 10 auto insurers late last week. This list already included GEICO, Progressive, Allstate, USAA, Liberty Mutual, Farmers, Travelers y American Family.
In addition, since the end of last week, the following insurers also announced offers or the possibility of requesting a grace period if requested… Erie, Hanover, CSAA, Kemper, Alliance United, Infinity, MetLife Auto & Home, Dairyland, Mercury, Plymouth Rock, NJM, Aspire General, Bristol West, National General, and Union Mutual.
According to the Insurance Information Institute, these and other auto insurers have announced rebates, discounts, dividends, and credits totaling $8.1 billion.
Does Prop 103 allow auto insurers to provide COVID-19 rebates? Maybe not.