California is taking action against three auto insurance companies, their drivers for premiums they were charged at the start of the Pandemic.
The three companies in question are Allstate Northbook Indemnity, Mercury Insurance and CSAA Insurance Exchange, which cover approximately 20% of Californian drivers according to an Oct. 6 press release from the state department of insurance.
Data analysis by the department showed these companies had the greatest gap between what they refunded drivers initially and what the department said they should have refunded.
Last year, millions of Californians stayed home to save lives, California Insurance Commisioner Ricardo Lara said in a statement. We drove less, lowering the risks for other drivers on the road. And because of this, I ordered insurance companies to return money to drivers. The new data shows these three insurance companies have the largest gap between what they did and what they should have done to provide further relief for their policyholders. If you think you're overpaying for car insurance, there are other ways to get a discount including switching insurers. State leaders say they are out of patience with insurers.
During the COVID 19 pandemic last year, California Auto Insurance companies refunded more than $2.4 billion in premium relief to drivers which was the most out of any other state in the U.S. the press release said Despite this, Lara said that the contributions from three corporations he addressed was not enough.
I'm out of patience on behalf of consumers, Lara said. The insurance companies have 30 days to tell us once and for all how they are going to make it right before we take further action. The department found that from March to September of 2020, insurance groups made adjustments and returned an average of 9% of car insurance refunds after Lara ordered that suitable refunds be made to all drivers. However, in March 2021, the Department said its data show that 17% of premiums should have been given in relief payments due to insurer's risk of loss vanishing dramatically.
During the pandemic, Californians' drove much less, but they continued to pay pre-pandemic insurance premiums for auto insurance. Insurance companies have captured an unearned windfall, recovered during an unprecedented crisis, and they must return the excess they collected after COVID changed everything, said Douglas Heller, insurance expert for Consumer Federation of America. Commissioner Lara's persistent actions of holding insurance companies accountable and trying to get policyholders their money back. If you need to save money on insurance, then look into changing your insurance policy. By switching automobile insurance policies, some drivers could save on their monthly premiums significantly. Visit Credible to get started and compare multiple companies at once, and choose the insurer with best price for you.
The state gave the three auto insurance companies 30 days from its order on Oct. 5 to respond. But Lara says it will not end there as the state will continue to analyze new data as it becomes available to see if it believes more consumers should be provided relief.
While some insurance companies have provided relief, Lara said our department will continue to analyze and seek out data to make sure all insurance companies adhere to my orders, seeking and making sure all insurance companies will do so, the Lara said. Consumer protection is my top priority. We will use every means we can find to hold insurance companies responsible for their actions during the pandemic. Earlier this year, Lara was further to continue to provide appropriate premium refunds or credits. If you're interested in saving on your auto insurance premiums, you can visit an online marketplace like Credible to compare quotes from multiple companies at once and choose the best insurance plan for you. Contact Credible to speak to an auto insurance expert and get all of your questions answered today.
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