California orders car insurance rebates due to coronavirus. Many carriers already cut rates
If you haven’t already, you could soon see a refund from your car insurance carrier.
California Insurance Comissioner Ricardo Lara has ordered carriers to return premiums paid for at least the months of March and April for insurance lines where the risk of loss has fallen substantially as a result of the COVID-19 pandemic.
If Gov. Gavin Newsom’s extends the state’s shelter-at-home order extend through May, Lara’s directive will apply to that month as well.
Many insurance carriers of the past two weeks have been announcing significant refunds and premium reductions. State Farm last week said it would return $2 billion to customers nationwide. Farmers is cutting car insurance rates by 25 percent in April, and Geico announced it was providing $2.5 billion in policy credits.
AAA Northern California refunded $100 million worth of auto insurance premiums to customers because the coronavirus has kept so many people at home and off the roads.
Lara’s order includes private passenger automobile, commercial automobile, workers’ compensation, commercial multi-peril, commercial liability and medical malpractice insurance, according to his office.
Caltrans is speeding up highway projects while coronavirus keeps Californians off the road
“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 in a statement. “Today’s mandatory action will put money back in people’s pockets when they need it most.”
Lara’s order requires insurers to provide a premium credit, reduction, return of premium “or other appropriate premium adjustment” as soon as possible, and no later that August of this year, according to the bulletin issued. This order coincides with a request from Lara’s office that insurance companies grant policyholders a 60-day grace period to pay their premiums.
