Drivers and business owners in California should get full or partial refunds on at least two months’ worth of insurance premiums because of the coronavirus-induced restrictions that have slashed commutes and shut companies’ doors, the state insurance commissioner’s office ordered Monday.
Commissioner Ricardo Lara ordered insurance companies to adjust insurance premiums covering March and April, since less activity means lower risk in several categories. Californians could also see refunds for their May premium payments if shelter-in-place restrictions extend into next month.
“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.”
The order to retroactively adjust insurance premiums applies to at least the following coverage areas: private passenger and commercial auto insurance; workers compensation; commercial multi-peril, which covers a variety of losses; commercial liability; and medical malpractice.
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Refunds are also required in “any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic,” Lara’s office said in the statement.
Customers should receive the refunds no later than August. They should come in the form of a premium credit, reduction, return or some other form of adjustment, the insurance commissioner’s office said.
