View this article online: https://www.insurancejournal.com/magazines/mag-features/2020/07/06/574248.htm
California automobile insurance companies have agreed to provide $1.21 billion in savings to drivers, the state insurance department says.
Insurance Commissioner Ricardo Lara in May issued an order requiring insurers to provide premium relief to policyholders affected by the COVID-19 pandemic.
The $1.21 billion figure includes $1.03 billion in premium relief for more than 18 million policyholders for the months of March, April and May while Californians struggled during the start of the COVID-19 pandemic, and an additional $180 million in future rate increases that insurance companies reduced in response to the commissioner’s orders.
The premium relief per policy for the months of March through May as reported by the 25 largest insurance companies ranges from $19 to $155, depending on the cost of the policy and the company’s formula for providing relief. The overall average relief per policy for the top 25 carriers is $57 or 3.63 percent of a policyholder’s annual premium.
Roughly half the companies returned premium to drivers in the form of a refund or dividend, while the rest offered a credit against future premiums.
The CDI is still analyzing reports submitted by insurance companies for the auto market and also for commercial lines included in the commissioner’s orders and will have further data available in the future.
In a media release, the Consumer Federation of America and the Center for Economic Justice applauded Lara for his leadership, saying his actions reflect the data and analysis that CFA and CEJ have been providing since mid-March.
The consumer advocacy groups say driving declined nationally during March, April and May due to the shut downs resulting from the COVID-19 pandemic.