Auto Insurance Companies Still Owe Refunds to California Drivers

California insurance commissioner Ricardo Lara urged auto insurance companies to refund premiums to policyholders to reflect the fall in auto accident claims. However, several major insurers have failed to comply, so they could face steep penalties in the near future.

In the wake of the COVID-19 pandemic, fewer drivers were on the road across the country. In California, people tended to stay home and travel less, leading to a decrease in auto accident claims. In early 2021, California insurance commissioner Ricardo Lara urged auto insurance companies to refund premiums to policyholders to reflect the fall in auto accident claims. However, three insurance companies may face steep fines for failing to adhere to the insurance commissioner’s warning. Here’s what drivers in Riverside County should know about the latest on insurance refunds.

What California Laws Say About Auto Insurance

When California voters passed Proposition 103 in 1988, the insurance commissioner assumed the authority of ensuring fair insurance rates and premiums for vehicle coverage. This legislation specified that auto insurance premiums should be based on miles driven, driving experience, and the driver’s overall safety record. Should an auto insurance company fail to comply, they could face up to $10,000 in fines per person the company overcharged.

Holding Auto Insurance Companies Accountable

In the early months of the pandemic, insurance commissioner Lara began to review all insurance company actions and compelled insurers to issue a refund for a portion of the policyholders’ premiums. So far, auto insurers have refunded more than $2.4 billion. However, Lara maintains that the ten largest insurers have refunded far less than the 17 percent average refund owed to policyholders. The insurance commissioner’s office will continue to pressure these companies to respond to the refund request within 30 days or face significant financial penalties.

Advocating For California Drivers’ Best Interests

Currently, California has seen the most regulatory pressure applied to auto insurance companies to treat policyholders fairly. As California drivers drove less during the pandemic, it stands to reason that the pre-pandemic premiums are no longer appropriate nor equitable. While some insurers have taken steps to issue refunds, larger companies like Allstate, Mercury, and CSAA have not acted quickly enough, according to the California insurance commissioner’s office. If you are struggling with an auto insurance issue in Riverside County, reach out to a knowledgeable attorney to discuss your case.

 

If you need help with an auto accident claim in Temecula or Murrieta, call Hales & Associates, A Professional Law Corporation, today at (951) 489-3320 to discuss your situation with a trusted auto accident lawyer.