California Orders Insurers to Refund Premiums to Drivers, Businesses Hit by COVID-19

April 13, 2020

  • April 13, 2020 at 10:31 am
    Insurance Agent says:
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    How will these “rebates” affect my agent insurance commissions? Did the commissioner just take commissions dollars out of my pocket?

    • April 13, 2020 at 12:14 pm
      Paul Hammack says:
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      So very every carriers voluntary announcement on personal auto credits has specifically stated there will be no impact on agent commissions. I’ve received notices from just about all the major carriers in Ca

    • April 13, 2020 at 1:28 pm
      Well... says:
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      Technically no, as they would be unearned commissions. Your commissions are not yours until the policy runs it full course, and should be held in trust, in order to be able to refund unearned commissions in the event of an endorsement to reduce coverage.

      Unless you feel like your clients should pay for coverage they don’t need.

  • April 13, 2020 at 11:02 am
    Brooklyn Anchor says:
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    On the flip side of this, if the government issues a mandatory evacuation, does that mean additional premium due to insurers?

  • April 13, 2020 at 12:46 pm
    Craig Winston Cornell says:
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    Hidden due to low comment rating. Click here to see.

    • April 13, 2020 at 1:21 pm
      CalDude says:
      Hot debate. What do you think?
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      Seriously Cornball?! Mitigation efforts have reduced the spread and death rate, so you imply that the spread and death rate were over predicted? Well, if that is the case, why don’t you just head on down to the local ICU and volunteer. No concerns, right?

      • April 13, 2020 at 1:27 pm
        Craig Winston Cornell says:
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        • April 13, 2020 at 1:49 pm
          Rosenblatt says:
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          “for those of us who can read and understand numbers, yes all of the predictions were FAR above reality.”

          Do we need another lesson about what a prediction is and how it’s constantly adjusted over time depending on how things change?

          For example, if the initial prediction was 2M deaths with no action and we now predict 100,000 deaths with physical distancing in place, 2M was not a prediction FAR above reality.

          • April 13, 2020 at 2:27 pm
            craig cornell says:
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            I can back up the statement I made by citing multiple predictions about what would happen AFTER a lock down. And they were ALL way too high.

            But rather than deal with your usual word-parsing nit picked nonsense, why don’t you just Google Alex Berenson. The former NY Times writer is cataloging how universally high all of the predictions were IF we locked down.

            And it is a joke.

          • April 13, 2020 at 2:28 pm
            craig cornell says:
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            And then when you are done reading Alex Berenson’s links to the laughable predictions, ask yourself this:

            Why haven’t you read about this in the media you access?

          • April 13, 2020 at 2:51 pm
            Rosenblatt says:
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            I guess we DO need another course of how predictions work.

            Dr. Fauci” “Because remember, what you do with data will always outstrip a model. You redo your models, depending upon your data, and our data is telling us that mitigation is working.”

            Also – remember when Berenson posted “This isn’t complicated. The models don’t work. The hospitals are empty…”

            while “Hospitals, of course, are not empty in places like hard-hit New York City, and tales are widespread of overburdened doctors and emergency rooms.”

            and then “Berenson acknowledged as much in the interview Thursday.”?

            Because fox news remembers.

            https://www.foxnews.com/politics/ex-nyt-reporter-challenging-the-coronavirus-narrative

            Nope, I’m not going to trust the guy who is saying “hospitals are empty” when they obviously aren’t over Dr. Fauci just because you said I should search him out instead of posting citations to prove your argument.

          • April 13, 2020 at 5:37 pm
            Craig Winston Cornell says:
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            And again, Rosenblatt goes full dishonest nit picker.

            Not only does he completely FAIL to post links to Berenson’s take downs of the “experts” predictions on Covid, Rosenblatt then goes all in on nit picking one unrelated thing Berenson said.

            And then just to make sure we know it’s Rosenblatt, he makes a false comment about Berenson. Clue for the Less: Berenson did not admit that hospitals in the USA were largely empty, his premise.

            He just admitted New York was an exception to the rule.

            Hilarious Nit Pick this time, Rosenblatt. It was both Off point AND irrelevant to Berenson’s point on another subject! NICE! A Twofer!

          • April 13, 2020 at 6:04 pm
            Craig Winston Cornell says:
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          • April 13, 2020 at 9:35 pm
            Jon says:
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            LOL you will really flip flop any argument at any moment to try and continue your right-wing agenda won’t you? Weren’t you yourself acting like this virus wouldn’t be a big deal just a few weeks ago? You keep nitpicking points to try and win an argument without ever admitting the many times you’ve been wrong.

          • April 14, 2020 at 8:19 am
            Rosenblatt says:
            Hot debate. What do you think?
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            “Rosenblatt…makes a false comment about Berenson…”

            So you’re saying my verbatim citation from Fox News was a false comment?

            That means you’re saying Fox News lied.

            Got it.

          • April 14, 2020 at 12:17 pm
            Craig Winston Cornell says:
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            I often wonder if you are just dishonest or incapable of simple logic.

            My point was that the predictions of doom were wrong/too high, especially those predictions of doom if we practiced the lockdown. Deaths and hospitalizations are FAR below those predicted by Washington University and every other source.

            Widespread news reports show that national hospitalizations are FAR, FAR below what was predicted if we effected lockdowns.

            The whole rationale for the lockdown was to “flatten the curve” and avoid overrunning the hospital system. That HAS NOT HAPPENED by a large margin. The lockdown was NOT to avoid deaths. It was to spread them out. No one expected a vaccine for at least a year.

            You shifted to a dumb argument about New York hospitals only.

            Typical Rosenblatt. Avoid the real issue. Nitpick a minor exception.

          • April 14, 2020 at 2:11 pm
            Rosenblatt says:
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            “The whole rationale for the lockdown was to “flatten the curve” and avoid overrunning the hospital system. That HAS NOT HAPPENED by a large margin.”

            You already know what the back end of this curve looks like?

          • April 14, 2020 at 2:32 pm
            craig cornell says:
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            And AGAIN a stupid comment from
            Rosenblatt. “HOSPITAL SYSTEM” is the subject of the sentence. The HOSPITAL SYSTEM has not been overrun, by a large margin.

            (Did you go to grade school?)

          • April 14, 2020 at 2:56 pm
            bob says:
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            You are incorrect. Social distancing is not the reason the estimates were off, it is leveling off even in countries that did not do much or were late to social distance.

            The estimates INCLUDED social distancing measures which were off.

            This shows the virus seems to have leveled off and mutated to become less severe, with a combination of it hit the more virus prone people first, like most sicknesses do.

            This slowing and lack of it getting as severe has nothing to do with us.

          • April 14, 2020 at 7:42 pm
            Jon says:
            Hot debate. What do you think?
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            LOL I love when people who aren’t virologists try to say they know exactly why everything happening with COVID-19 is happening. You are not an expert, you are regurgitating information you’ve seen on mostly opinion based right-wing conservative trash sites.

          • April 15, 2020 at 10:18 am
            PolarBeaRepeal says:
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            The implied qualifier that ONLY virologists can understand medical terms and comment on their meanings is an indirect violation of Freedom of Speech Rights (in 1st Amdt.), and TOS of the IJ website.

            Such a statement qualifies as a failed attempt to censor those with whom the poster disagrees, and results from inability to directly refute the statement of fact or opinion.

          • April 15, 2020 at 3:53 pm
            Jon says:
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            Aside from the point that YOU ARE NOT AN EXPERT. Your opinion is meaningless on a subject you have zero education in and you know it.

  • April 13, 2020 at 1:03 pm
    Lew Snow says:
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    Understand the decision but the Commissioner has to put some structure around this. Businesses that were deemed “essential” and remain open have a full exposure during this time and their premiums should be unimpacted (example – grocery stores, car mechanics, etc). Businesses that were able to stay open but had restrictions should get some relief (example – restaurants). Business that were closed or forced into work-at-home situations should get greater relief.

    • April 13, 2020 at 5:32 pm
      CL PM says:
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      Lew – I manage a BOP product for a national carrier with a large book in CA. While you are correct that the reduction in exposure created by the stay-at-home order varies by type of business, we have seen a dramatic decline in claim frequency since the orders were issued across the country. We were already working a rate relief strategy before Lara’s order. To get this done quickly, it needs to be very simple, so our reduction will be across all business classes. In one sense, that is how insurance works – it is priced across the line of business to reflect the losses suffered by the few. I’m OK with this broad brush approach for BOP for this very unusual situation. If I managed a book of very large risks, the approach would need to be different.

  • April 13, 2020 at 1:45 pm
    Mark B says:
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    The carriers were already offering a 15% credit on privater passenger auto for April and May. The commissioner is completely clueless and is simply using this as a political at a boy.
    The order reads like this: Commissioner Lara grants each insurer reasonable flexibility in determining how best to
    quickly and fairly accomplish the refund of premium to policyholders. Insurers may
    comply with the premium refund order by providing a premium credit, reduction, return of
    premium, or other appropriate premium adjustment.

    Translation. I don’t have a clue what to do but do something so I look good.

    • April 20, 2020 at 11:10 am
      Lee H. says:
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      I’ve been a licensed broker for 40 years in Nevada. So far our commissioner hasn’t made any “demands” on the industry that I have heard. Personally, my auto insurer is applying a 15% discount on premium to existing and new insured’s for 6 month policies from April 8-Oct. 8. I’m a happy camper.

  • April 13, 2020 at 3:15 pm
    Karen W says:
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    OK I get it with regard to auto. We aren’t driving as much. Non essential businesses aren’t driving as much either. But any commercial line of coverage (such as Work Comp or GL rated on sales/payroll) is auditable so the audit system will take care of this. Maybe the company’s position should be not to refund money on these lines, but be willing to process a mid-term endorsement to reduce exposure base if specifically requested by the insured.

  • April 13, 2020 at 3:30 pm
    John says:
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    Talk about throwing the baby out with the bathwater. Does Ricardo Lara even understand how insurance works? In a few short weeks he is trying to destroy an industry he supposedly regulates.

    All the carriers I know are working with insureds who NEEDED assistance but he continues to polarize a catastrophic event so he can get votes and end up wherever he is ultimately trying to go.

    Why can’t he be more definitive and limit the amount of chaos he continues to stir up?

    • April 13, 2020 at 7:20 pm
      Oh Goody says:
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      The carriers I work with are not allowing reductions in exposure, or are limiting reductions to 20%. I don’t know how this is going to work, but at least we can tell insureds that they will be getting some relief by August instead of them just cancelling their policies. I have insureds with dozens or even hundreds of vehicles that are sitting in parking lots and they don’t know what else to do.

  • April 13, 2020 at 3:56 pm
    Hector Projector says:
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    This would have worked more smoothly if Gavin Newsom and Ricardo Lara were deemed nonessential and ordered to stay home and be unemployed. But then who would there be to give us permission to breath?

  • April 13, 2020 at 4:01 pm
    Hector Projector says:
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    Also, it works really well whenever you see a notice like this to substitute “due to the governor’s mandatory shelter-in-place order” for “due to the COVID19 pandemic”. It works like this,”…Hearing to redress excessive automobile insurance rates and premiums caused by the COVID-19 pandemic” becomes the more accurate, “…Hearing to redress excessive automobile insurance rates and premiums caused by the governor’s mandatory shelter-in-place order.”

  • April 13, 2020 at 4:05 pm
    Hector Projector says:
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    200,000 is 6% of 1% of 329 million people. I love you, Grandma, but ya know. Just sayin’. The unemployment numbers are a big number AND a big percentage, though.

  • April 13, 2020 at 11:07 pm
    knowall says:
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    any state requiring this refund should also refund any premium taxes or assessments made on an insurance company for the same time period can refund that to the insured as well

  • April 14, 2020 at 8:53 am
    E&S Guy says:
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    Per the DOI, the order applies to admitted carriers only, if that helps anyone out there…

  • April 14, 2020 at 6:40 pm
    John says:
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    Ricardo Lara is a crooked politician who never should have gotten into an industry he obviously knew nothing about. The chaos he creates is incredibly frustrating!

    Read the article about him taking bribes and living beyond his means.

    https://www.insurancejournal.com/news/west/2019/09/19/540547.htm



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