Client Watchdog Urges Auto Insurance coverage Refunds for Pandemic Earnings

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Insurance coverage corporations have overcharged Californians by billions of {dollars} for the reason that COVID-19 lockdowns started in March 2020, sixteen months in the past. In a letter to California Insurance coverage Commissioner Ricardo Lara, Client Watchdog proposed a plan to get that cash again to customers, and to require that insurance coverage corporations decrease their charges to mirror the projected ongoing influence of the pandemic.

Client Watchdog first urged the Commissioner to implement his prior orders by requiring corporations to refund extra premium overcharges resulting from lowered claims whereas many drivers stayed dwelling and companies had been closed. The group famous that its evaluation reveals that auto insurance coverage corporations alone overcharged drivers by no less than $5.5 billion in 2020 –  however have refunded lower than half that quantity regardless of Commissioner Lara’s earlier directives. Client Watchdog additional really useful that refunds be ordered for insurance coverage bought by small companies, medical doctors and different prospects. Underneath California’s voter-approved insurance coverage regulation regulation, Proposition 103, insurance coverage corporations should keep charges at honest ranges, and extreme charges are illegal.

Second, the group urged the Commissioner to require all insurance coverage corporations in California to submit new price purposes with the intention to decide how a lot the present charges – which had been set previous to the pandemic – needs to be lowered to mirror decrease accident charges and lowered claims within the coming months as California’s financial system recovers from the pandemic.

“Insurance coverage corporations have reaped a windfall because of their pandemic profiteering,” Client Watchdog advised the Commissioner. “It’s clear that insurers haven’t and won’t voluntarily return the complete quantity of overcharges owed Californians and won’t decrease their charges prospectively as warranted, except you pressure them to take action….Because the financial system reopens and plenty of Californians are struggling to get better financially from the pandemic, we urge you to grab the chance to train your broad authority to take decisive motion to revive to California’s customers the extra overcharges they’re owed. Insurers shouldn’t be allowed to stroll away with half the cash on the desk. Nor ought to they be permitted to proceed charging extreme charges.”

Learn Client Watchdog’s  letter to Insurance coverage Commissioner Lara proposing a plan to cease insurance coverage firm profiteering and get Californians their a refund.

                                                                   Background

Client Watchdog is a non-profit, non-partisan group. Its founder wrote Proposition 103 and its advocates have labored with Insurance coverage Commissioners and different public officers to defend and implement the regulation since its passage in 1988. The initiative has saved Californians over $153 billion on their auto insurance coverage alone because it took impact.

Learn Client Watchdog’s June 29, 2021 evaluation of how auto insurance coverage corporations overcharged motorists by an estimated $5.5 billion in 2020 alone – and the way the highest 15 corporations solely refunded $1.9 billion, incomes them 4 occasions the authorized revenue limits set by state regulation.

Learn how Proposition 103 protects Californians towards overcharges, requiring all auto, dwelling and enterprise insurance coverage corporations to take care of honest charges and to open their books and justify requests for price adjustments earlier than they will take impact.

Learn the Insurance coverage Commissioner’s official bulletins ordering insurance coverage corporations to refund extreme premiums to policyholders.

 

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