16 Apr Insurance Companies Refund Premiums
California’s Insurance Commissioner Ricardo Lara ordered Insurance Companies to refund premiums to Drivers and the Businesses affected by the COVID-19 Pandemic.
The order covers premiums paid for the months of March, April, and including May if shelter in place restrictions remain. This includes private passenger automobiles, commercial automobiles, worker’s compensation. commercial multi-peril co commercial liability, medical malpractice, and any other insurance line where the risk of loss has fallen substantially due to COVID-19.
Commissioner Lara says, “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. Today’s mandatory action will put money back in people’s pockets when they need it most.”
The Commissioner Bulletin requires insurance companies provide a premium credit, reduction, return of premium, or other appropriate premium adjustments as soon as possible and no later than August 2020. Commissioner Lara has already requested at least a 60-day grace period for policyholders to pay their premiums. Insurance policies will not be cancelled for non payment of premiums during this time.
U.C. Davis has just come out with a report on the impact of Coronavirus on CA’s traffic accidents. According to the report, reduced driving has resulted in fewer accidents, injuries, and fatalities on roads and highways. Also, since businesses have had to close there is less payroll and receipts which reduced Insurance Companies risks.
Finally, Commissioner Lara’s order requires Insurance Companies to report back to the Department of Insurance all premium refunds they have issued or expect to issue within 60 days. He says he will be watching to make sure they comply with the order.
Stay safe #flattenthecurve #socialdistance