Commissioner Navarro Responds to Report of Premium Increases for Military Members

February 14, 2020

Delaware Insurance Commissioner Trinidad Navarro responded strongly to a Consumer Federation of America report that Delaware service members may return home from deployment to increased auto insurance premiums, calling the practice completely unacceptable and issuing a formal bulletin to insurance companies about the illegality of this practice in Delaware.

Commissioner Navarro said in a Delaware Department of Insurance press release that he plans to work with the General Assembly to expand protections from the “patriot penalty.”

Trinidad Navarro

“Service members and their families deserve to be treated like the heroes they are, returning home to gratitude and respect, not financial penalties,” Navarro said in the release. “If a member of the military terminates their auto insurance because they are serving away from home and no longer using a personal vehicle – whether in another state, another country, or in international waters – they are making a personal financial decision that should not increase their auto insurance rates in the future.”

Last week, the Consumer Federation of America distributed a letter to Insurance Commissioners detailing an investigative report that shows that service members who incur a lapse in coverage due to deployment are later charged higher premiums, even when the company is aware that the lapse is due to deployment, although the Delaware Department of Insurance said in its release that it is not aware of specific Delaware residents experiencing this issue.

Delaware banned this practice in 2008 after a resident who served in Iraq for more than a year experienced a premium increase upon return, extending the protection to spouses that accompany a service member in overseas service as well. Currently, the law is only applicable to deployments outside of the continental U.S., but Commissioner Navarro said in the release that he wants to change that.

“Members of our armed services should be protected from the ‘patriot penalty’ regardless of the specific location of their deployment,” stated Navarro, who also intends to remind insurers of their existing legal obligations and responsibilities to residents who serve overseas and their accompanying spouses via a formal bulletin to the insurance industry. In the bulletin, Navarro stated that the practice is “illegal in Delaware and is punishable to the full extent allowed under the Delaware Insurance Code.”

Anyone who thinks that they may have experienced a “patriot penalty” is urged to contact the Delaware Department of Insurance right away. Should individuals come forward with this concern, the auto insurance company where this occurred will be investigated thoroughly and appropriate action will be taken if the company is acting contrary to Delaware law, the release stated.

Source: Delaware Department of Insurance

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