Californians Could See More Money From Auto Insurance Refunds

Insurance Commissioner Ricardo Lara has ordered three auto insurance companies – Allstate, Mercury and CSAA – to reimburse California drivers for the excess premiums they were charged while driving less at the start of the pandemic or s. exposed to legal action, according to the California Department of Insurance. Together, these companies insure 20% of California drivers.

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These companies have the biggest gap between what has been reimbursed to California drivers and what should have been reimbursed since the start of the pandemic.

“Last year when the pandemic hit millions of Californians stayed at home to save lives. We drove less, reducing the risk for other drivers on the road, ”said Commissioner Lara. “On behalf of consumers, I am at the end of my patience. These insurance companies have 30 days to tell us once and for all how they’re going to do it before we take any further action. “

California drivers continued to pay auto insurance premiums before the pandemic, and insurance companies retain an “undeserved windfall” that must be returned, said Douglas Heller, insurance expert for the Consumer Federation of America. “We appreciate Commissioner Lara’s persistence in holding insurance companies accountable and in fighting for insureds to be reimbursed.

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In March 2020, Lara ordered all P&C insurance companies operating in California to refund the appropriate premiums to consumers. This has been extended until June 2020 and beyond “if conditions warrant”.

Recently, in March 2021, Lara ordered insurance companies to continue providing refunds or credits. Data from the ministry showed that the risk of loss had decreased significantly and that insurance companies had overcharged consumers.

Under Proposition 103, Lara has the power to ensure that rates are treated fairly, reports the Los Angeles Times. Businesses that break this law risk overcharging up to $ 10,000 per person. The actions resulted in $ 2.4 billion in premium relief for drivers, the most reimbursed nationally, according to the California Department of Insurance.

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The Ministry also found that between March and September 2020, insurance companies reimbursed an average of 9% of automobile premiums; however, it should have been almost double at 17%.

The LA Times noted that insurers claim to have complied with guidelines from state officials.

“Not only have we helped drivers, but we’ve been there for Californians throughout the wildfires paying thousands of insurance claims and expanding our coverage offerings this year to help alleviate the availability crisis. homeowners insurance, “Allstate said in a statement. .

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Mercury also released a statement saying the company has refunded more than $ 175 million in premiums to California customers and “continues to provide continued premium relief to hundreds of thousands of customers who drive less due to the pandemic.” .

Allstate, Mercury and CSAA have 30 days from October 5 to respond.

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Last updated: October 12, 2021

This article originally appeared on Californians Could See More Money From Car Insurance Refunds

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Justin D. O'Neill

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