Issue IV: Auto Insurance & COVID-19

May 1, 2020

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 chose to assist California drivers in several ways, including by ordering auto insurers to give their insured drivers refunds on their premiums. This guide addresses the new regulations and has tips for how to get your 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 must provide you some kind of premium refund for March and April by August 11, 2020.

The Commissioner ordered auto insurers (and insurers for a few other types of insurance) to issue premium refunds for the months of March and April to all adversely impacted California policyholders, no later than 120 days after the order. However, the insurers have flexibility in how they deliver their refunds (for example, through “premium credit, reduction, return of premium, or other appropriate premium adjustment”).

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. If the pandemic continues, the Commissioner will make further orders.

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 above for info regarding premium refunds.

Q. What if my license or registration expired or is set to expire? 

A. The governor recently signed an executive order to extend deadlines for renewing your driver’s license or California ID by 60 days. Your insurance should not lapse due to an expired license.

Governor Newsom signed an executive order on April 22, 2020, to extend several DMV deadlines by 60 days, including renewing driver licenses, California IDs, and vehicle registrations. If you do not renew your registration on time, you will still have 60 days to renew it and pay for it (with no late fees) from the time it was due.

The DMV field offices are closed, but are still providing services by “mail, through available online services, kiosks, virtually and other means.” You may be able to renew your driver license on the DMV website. You can renew your registration online.

In terms of maintaining your car insurance, Commissioner Lara has called on auto insurers to maintain insurance for drivers with expired licenses for 60 days.

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 they should be motivated to try to work with you.

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