More Insurance Premium Refunds on the Way
If you pay for automobile insurance, you may have received small premium refunds or credits towards your payments during 2020 due to decreased driving during the pandemic. Your auto insurance rates are based partly on how many miles per year you drive – that is why you are asked to estimate your yearly mileage when you buy an insurance policy.
To the surprise of no one here at AutoAccident.com, it turns out that the billion-dollar insurance companies were crediting customers far less than what was reasonable or fair. California drivers were shortchanged on refunds, and on March 11, 2021, the state’s insurance regulator issued a statement addressing the disproportionate refunds.
Watch the YouTube video. Below is California Insurance Commissioner Ricardo Lara’s statement to insurance companies.
Empty Highways Mean Fewer Accidents
Traffic volume in California plummeted following the initial stay-at-home order last March. As a result, the number of car crashes dropped by approximately 55%. Researchers from the University of California at Davis found that in the weeks following Governor Gavin Newsome’s stay-home order, injuries and fatalities from automobile accidents were reduced by more than half.
Millions of Californians did their part and stayed home in compliance with the order, and many continue to drive far fewer miles than they had before COVID-19 hit. Commissioner Lara says that consumers deserve lower insurance rates as a result of the safer highways. He stated that insurers are continuing to overcharge their customers, and he ordered insurance companies to calculate another round of credits and refunds.
Running the Numbers
- The Top 10 insurance companies represent 80% of the automobile insurance market. Included in the top ten are USAA, Farmers, Allstate, CSAA, and State Farm.
- Injury claims dropped close to 42% and claims for property damage fell by more than 40% during March through September 2020 when compared to the same period in 2019.
- Insurance companies credited or refunded around 9% of premiums to their customers. Commissioner Lara says that that number should be 17%.
- Every insurance company issued refunds or credits ranging from 10% to 22% for the period of March through May 2020, but by December 2020, only four insurance companies continued to offer refunds despite the fact that most of the state was under mandatory shutdown orders.
The Commissioner ordered every insurance company to report by April 30, 2021, on how they intend to refund the monies owed to their customers.
Response from the Insurance Industry
The representative agency for the insurance industry, American Property Casualty Insurance Association, has responded that there will be compliance with Lara’s new order. At the same time, the agency pointed out that traffic fatalities had increased by close to 5% during the first nine months of 2020, despite the reduction in miles traveled. The agency attributed this increase to drivers engaging in “riskier behavior” such as driving under the influence, speeding, and foregoing seat belts. There is a concern that trends in risky driving behavior could continue and result in even more fatalities as we see traffic begin to return to levels that existed prior to the pandemic.
Sacramento Personal Injury Lawyer
Hello, and thank you for reading. I’m Ed Smith, and I have been a personal injury lawyer in Sacramento, California, for close to four decades. As you can see from the subject of this article, insurance companies are mainly interested in protecting their own bank accounts. This does not only affect whether you get a reasonable refund on insurance premiums during a pandemic, but it also comes into play during personal injury claims. Insurance adjusters have many tactics to avoid paying on claims. If you have been injured in a car crash due to the actions of a negligent driver, let us handle the insurance company. That way, you can ensure that your rights are protected, your financial recovery is maximized, and you can focus your energies on returning to good health.
For compassionate, free, and friendly advice, call to speak with one of our injury lawyers at (916) 921-6400. From outside the local area code dial toll-free at (800) 404-5400.
Photo: MMB
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