It’s an ill wind that brings no one some good. Amidst the truly nasty ill wind that is the coronavirus outbreak is the news that many motorists will be getting a refund from their car insurance company because they are sheltering-in-place and not driving as much. Less driving means fewer claims.
And it’s not just car insurance. Other types of insurance will also be issuing refunds due to reduced numbers of claims.
The Escondido Chamber of Commerce was quick to start distributing information from the California Insurance Commissioner Ricardo Lara, who ordered almost every kind of insurer to issue refunds.
Chamber CEO James Rowten told The Times-Advocate: “The Chamber believes that there is a balance needed to assure that all parties are given due consideration when taking actions affecting all of us in these challenging times. We do not believe that left unchecked companies will not do the right thing in serving the needs of the customers. We believe ultimately the consumer will decide and choose who they do business with and successful businesses will recognize this now or suffer the consequences.”
According to Lara “projected loss exposures of many insurance policies have become overstated or misclassified. This is especially true for policies where premiums are based partly on measures of risk such as number of miles driven, revenue, and payrolls which have all dropped significantly because of COVID-19.”
Lara cited the UC Davis Special Report on Impact of COVID-19 on California Traffic Accidents, which notes that reduced driving has resulted in fewer accidents, injuries, and fatalities on public highways and roads.”
Commissioner Lara singled out other types of insurance that will be required to issue refunds within 120 days after getting notification:
• Private passenger automobile insurance
• Commercial automobile insurance
• Workers’ compensation insurance
• Commercial multiple peril insurance
• Commercial liability insurance
• Medical malpractice insurance
• Any other line of coverage where the measures of risk have become substantially overstated as a result of the pandemic.
Persons who have policies with any of those agencies should probably call their agent directly to find out more.