Thursday, April 16, 2020

California Orders Insurance Premium Refunds Over COVID-19

Insurance companies have been ordered to return premiums to customers and businesses affected by the novel coronavirus pandemic by order of California Insurance Commissioner Ricardo Lara, his office announced early Monday, April 15.

The commissioner's office said the shelter-in-place order across the state has reduced the overall risk of loss and thus these premium refunds were warranted.

"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 premiums covered are for March, April and May of 2020, if the shelter-in-place order continues through then.

The particular categories of insurance premiums covered by the order are: private passenger automobile, commercial automobile, workers' compensation, commercial multi-peril, commercial liability, medical malpractice and "any other insurance line where the risk of loss has fallen substantially as a result of the COVID-19 pandemic."

Insurance companies have until August to comply with the order -- whether through premium credits, reductions, return of premiums or other appropriate premium adjustments.

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