Issue IV: Auto Insurance & COVID-19

UPDATED June 3, 2021

Part of our COVID-19 Consumer Protection Guide series.

Since the shelter-in-place orders have been in effect, Californians have been driving much less, for obvious reasons. California’s Department of Insurance has attempted to assist California drivers in several ways, including by ordering auto insurers to give their insured drivers refunds on their premiums. This guide addresses these regulations and has tips for how to get an insurance refund if you haven’t already received it.

FAQs for Drivers

Q. I hardly drive these days. Shouldn’t I pay less for insurance?

A. Yes! California auto insurers should provide you some kind of premium refund for as long as the pandemic results in reduced insurance risk.

The Insurance Commissioner has ordered auto insurers (and insurers for a few other types of insurance) to issue refunds on insurance premiums from March 2020 onward to all California policyholders who have reduced insurance risk due to the pandemic. This means that you might be eligible for a lower insurance premium from last March until the pandemic ends. If you have been overcharged, you should get a refund. 

If you qualify, your insurance company is responsible for giving you some money back or reduced rate on your premium. Insurance companies have flexibility in how they return it to you. For example, they might give you a direct payment, credits on your premiums, or future premium offsets. Insurance companies are directed to communicate with you about how they will return premiums, as well as options available to consumers to reduce ongoing premiums.

The Commissioner did not specify an amount or percentage that the insurers must return, so the amount you get back will depend on your insurer and your policy. Unless further specified by the Commissioner, this refund will continue until pandemic conditions improve.

You may have already received a notice from your insurer about how they are reducing your premium or crediting you in some way. If not, you should reach out to them and ask for a premium reduction.  

Q. What if I can’t pay my insurance premium?

A. The California Department of Insurance has requested that all insurers provide a 60-day grace period, and many companies have opted in.

Insurance Commissioner Ricardo Lara requested that all insurers provide policyholders a 60-day period to pay their insurance premiums starting March 18, 2020. This includes life, health, auto, property, casualty, and other types of insurance. Many companies have elected to participate in various ways. 

The Commissioner’s notice was not highly specific, likely since it was a request rather than a rule or order. If you are having trouble paying your insurance premium, you should contact your insurer and see what options they have. See below for info regarding premium refunds.

Q. What if I need to file a claim with my insurance company?

A. Deadlines to file a claim or provide documentation are extended until 90 days after the statewide “state of emergency” has ended.

Commissioner Lara sent out a notice to all insurance companies, instructing that they “should not attempt to enforce policy or statutory deadlines on policyholders until ninety (90) days after” the statewide “state of emergency” or any other state of emergency related to COVID-19 has ended. This order is designed to protect policyholders from losing, limiting, or waiving policy benefits as a result of the current state of emergency.

Q. What if my insurance company does not comply with these regulations?

A. You can file a complaint with the Department of Insurance.

The California Department of Insurance accepts complaints from consumers who are experiencing an issue with an insurance company. Additionally, insurance companies have great incentive to try to keep their customers right now, so should be motivated to try to work with you. 

This guide is intended for informational purposes only and does not provide legal advice.