Two consumer groups are urging California auto insurers to extend the refunds and credits announced last month beyond Sunday May 31. The rebates were in response to the decrease in driving as a result of COVID-19. Although a portion of California is starting to reopen traffic remains far below the levels from the same time period last year.
California Insurance Commissioner Lara’s order requiring insurers to provide premium relief in auto and other insurance lines where “the risk of loss has fallen substantially” ends on May 31, 2020 but could be extended if stay at home orders continue to artificially limit the miles driven by consumers. As of Tuesday USAA and Allstate are the only companies extending the relief period beyond May 31, 2020. State Farm says they are working to reduce premiums in every state by 11% and the earliest these rate cuts could appear will be between July and September 2020.
The Consumer Federation of America also sent a letter to state insurance commissioners urging them to ensure that “pandemic-related insurance relief is sufficient.” In a subsequent news release they said “most companies have granted significantly less relief” than State Farm is offering and that “only the insurance commissioners in California and New Jersey have ordered insurers to issue refunds and prove they are returning enough to the policyholders. California Insurance Commissioner Lara has set a deadline of June 13 for insurers to report exactly how they have complied with the order.
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