If you’ve been driving during the pandemic, money could come to you.
The California Department of Insurance said three major state insurance companies overcharged customers for auto insurance during the COVID-19 crisis. Businesses have a month to explain why, start reducing checks or face possible legal action.
The three insurers share a large chunk of California’s auto insurance market, according to the state Insurance Commissioner, who said he charged what he calls pre-pandemic rates to people whose driving habits have changed. considerably decreased.
Californians have been told to stay at home during the early stages of the pandemic to help save lives and prevent the spread of the coronavirus. Insurance commissioner Ricardo Lara ordered all insurers to reimburse and reduce car premiums.
This result was $ 2.4 billion in savings for drivers.
“In the same order, I ordered them to provide us with data, and now that we are processing the data, we have found that many insurance companies have not done enough,” said Lara.
Allstate, Mercury and CSAA Insurance are the worst offenders in terms of automobile premium refunds to drivers. The three companies combined provide auto insurance to 20% of California drivers, but looking at reimbursements given to drivers between March and September 2020, Lara said there was a huge gap between what was reimbursed and what is being reimbursed. really due.
Insurance company groups have reimbursed an average of 9% of auto premiums, but they should have actually returned double that amount, Lara said. The gap for the three worst offenders is larger than the average refund, he added.
“An appropriate reimbursement will be one that matches the reduced risk of loss as shown by insurance industry data,” said Lara.
Lara said time is running out and her legal team is on hold if her deadline is missed.
“They have 30 days to tell me how they’re going to get consumers money back as quickly as possible before we act,” Lara said. “I’m starting with these three to send the message that I’m not going to accept this from another insurance agency as well.”
The I-Team contacted the three insurers. Their statements are below.
“We were the first insurer to respond to the decrease in driving during the pandemic by returning $ 1 billion to drivers across the country and still providing our customers with affordable coverage. 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 fuel availability crisis. homeowners insurance.
“We have received the letter from Commissioner Lara, are currently reviewing the request and will respond within the requested time frame. In 2020, CSAA Insurance Group issued over $ 137 million in total policyholder reimbursements as part of our commitment to help AAA members prevent, prepare for, and recover from life’s uncertainties.
“To date, Mercury has reimbursed over $ 175 million in premiums to our California customers and continues to provide ongoing premium relief to the hundreds of thousands of customers who drive less due to the pandemic. Additionally, Mercury has personalized billing plans for thousands of policyholders who have experienced financial hardship as a result of the pandemic so they can stay insured and protected. Going forward, Mercury will continue to do the right thing for its customers, including offering some of the lowest rates in the state while continuing to provide award-winning service. “
Lara argues that there may be other insurers who owe more money and could face similar delays or legal challenges.