California Insurance Commissioner Ricardo Lara issued an order to auto insurance companies to provide refunds to customers because fewer cars are on the road during the COVID-19 pandemic.
With people remaining home as much as they can due to California’s shelter-in-place order, there’s been an unprecedented decrease in the number of cars on the road.
“Commissioner Lara hereby orders insurers to make an initial premium refund for the months of March and April to all adversely impacted California policyholders in the following lines of insurance, as quickly as practicable, but in any event no later than 120 days after the date of this Bulletin. (April 13, 2020),” Lara’s office announced on April 13.
This order applies to all of the following: Private passenger automobile, commercial automobile, workers’ compensation, commercial multiple peril, commercial liability, medical malpractice insurance, and lines of coverage that overestimated levels of risk during this time.
Allstate, State Farm and AAA have already offered return premiums, while others are hesitant to begin this process.
“It’s clear that for the bulk of insurers, there’s room for improvement — even among those providing relief,” said Birny Birnbaum, executive director of the Center for Economic Justice. “There’s certainly room for those who haven’t taken action to provide relief.”
The immediate halt of operations for “non-essential” businesses left millions of citizens out of a job and a steady income and kept them off the road.
— By Rylee Holwager