Car insurance COVID-19 refunds in California

Car insurance COVID-19 refunds in California

Due to COVID-19 and the state’s shelter-in-place requirements, people, in general, are driving much less. The result from drivers driving less is that they’re using less gasoline and emitting fewer pollutants into the atmosphere. It also means there’s been a lot less traffic on the roads which translates into fewer car accidents.

Logically, less car accidents should then translate into a decrease in the cost of car insurance. Not the case. And, as a result, many insurance companies have come under fire for their lack of action during the COVID-19 pandemic. Some of their critics have even gone so far as to accuse them of trying to profit from the crisis.

So, most of the major insurers, including Allstate, Geico, and Nationwide, have begun to offer refunds for car insurance premium payments. But, California insurance commissioner, Ricardo Lara, has taken car insurance refunds in California a step further.

You shouldn’t need to do anything

On April 13, Commissioner Lara ordered all insurance companies to issue car insurance refunds for COVID-19 relief for the months of March and April because of the state’s shelter-in-place order. And, his order may extend into May.

“With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss,” Lara said in a statement. “Today’s mandatory action will put money back in people’s pockets when they need it most.”

Most of the major insurers are offering a 15% average refund on car insurance bills. In addition, the state of California has ordered insurance companies to provide the Department of Insurance with a list of all premium refunds that are issued or plan to be issued within the next two months. Hopefully, this requirement will ensure compliance with the state’s mandate on the part of the insurance companies.

Have questions?

Insurance companies have 120 days to comply with the mandate for car insurance refunds.  Commissioner Lara’s order has provided insurers with several options: refund premiums, reduce them, or give customers a credit. Refunds can be based on the estimated change in risk, with amounts based on an average percentage.

If you have any questions regarding the state mandated refunds or you’re in the market to find a new car insurance policy, consider working with an insurance broker.  Daniel Fraisse, California car insurance broker in Los Angeles, can save you the time and the hassle of deciding on the insurance company and type of coverage that gives you the most for your money. 

As an independent insurance broker, Dan Fraisse works for you, not for the insurance companies. He’ll work with you to put together an insurance policy that fits your needs as well as your budget.

Call our office to get your free insurance quotes.