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Auto Insurance Refunds To Be Issued In CA For Drivers, Businesses Affected By Coronavirus

California auto insurance agencies are set to issue refunds to those impacted by the coronavirus after an order was issued by the state insurance commissioner, officials said Monday.

California Insurance Commissioner Ricardo Lara ordered insurance companies to return insurance premiums to consumers and businesses in an effort to provide financial relief during the COVID-19 emergency.

“I applaud efforts made by insurance companies to date that have offered grace periods and flexibility to consumers and businesses during this national emergency,” Lara said. “We must do more to help our hard-working families and small businesses.”

The commissioner’s bulletin covers premiums paid for at least the months of March, April and May if “shelter in place” restrictions continue, in at least six different insurance lines: private passenger automobile, commercial automobile, workers’ compensation, commercial multi-peril, commercial liability, medical malpractice, and any other insurance line where the risk of loss has fallen substantially as 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 present-day risk of accident or loss,” Lara said. “Today’s mandatory action will put money back in people’s pockets when they need it most.”

The commissioner’s bulletin requires insurance companies to provide a premium credit, reduction, return of premium, or other appropriate premium adjustment as soon as possible and no later than August 2020.

Lara has already requested at least a 60-day grace period for policyholders to pay their premiums so that insurance policies are not cancelled for nonpayment of premium during this time. Together, these two actions give consumers and businesses substantial financial relief, according to officials.

A UC Davis special report on the impact of COVID-19 on California traffic accidents showed that reduced driving has resulted in fewer crashes, injuries and fatalities on public highways and roads. Falling payroll and receipts due to closure orders have also dramatically reduced risk of a liability loss for businesses.

Several auto insurance companies have recently announced voluntary premium refunds to drivers. Monday’s bulletin extends these private personal auto policy reductions to more companies and adds commercial lines while monitoring insurance companies’ compliance with California’s consumer protection laws so that refunds are not discriminatory or inadequate.

A premium refund will not require prior approval by the Department of Insurance if an insurance company follows certain methods outlined in the commissioner’s bulletin, such as using an average percentage based on estimated change in risk or exposure. Consumers are also set to have the opportunity to provide their individual actual or estimated experience to their insurance company.

Lara also ordered insurance companies to report back to the Department of Insurance all premium refunds they have issued or expect to issue within 60 days, in order to provide oversight and ensure companies are complying with the bulletin.


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Auto Insurance Refunds To Be Issued In CA For Drivers, Businesses Affected By Coronavirus

One comment

  1. Hi, how can I get my refund?

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