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Classified in: Health, Business, Covid-19 virus
Subjects: NPT, POL, AVO

Insurance Companies Overcharged Californians by $Billions During the Pandemic - Here's How to Get it Back

LOS ANGELES, July 30, 2021 /PRNewswire/ -- Insurance companies have overcharged Californians by billions of dollars since the COVID-19 lockdowns began in March 2020, sixteen months ago. Today, in a letter to California Insurance Commissioner Ricardo Lara, Consumer Watchdog proposed a plan to get that money back to consumers, and to require that insurance companies lower their rates to reflect the projected ongoing impact of the pandemic.

Consumer Watchdog first urged the Commissioner to enforce his prior orders by requiring companies to refund additional premium overcharges due to reduced claims while many drivers stayed home and businesses were closed. The organization noted that its analysis shows that auto insurance companies alone overcharged drivers by at least $5.5 billion in 2020 ?  but have refunded less than half that amount despite Commissioner Lara's previous directives. Consumer Watchdog further recommended that refunds be ordered for insurance purchased by small businesses, doctors and other customers. Under California's voter-approved insurance regulation law, Proposition 103, insurance companies must maintain rates at fair levels, and excessive rates are unlawful.

Second, the organization urged the Commissioner to require all insurance companies in California to submit new rate applications in order to determine how much the current rates ? which were set prior to the pandemic ? should be reduced to reflect lower accident rates and reduced claims in the coming months as California's economy recovers from the pandemic.

"Insurance companies have reaped a windfall as a result of their pandemic profiteering," Consumer Watchdog told the Commissioner. "It is clear that insurers have not and will not voluntarily return the full amount of overcharges owed Californians and will not lower their rates prospectively as warranted, unless you force them to do so....As the economy reopens and many Californians are struggling to recover financially from the pandemic, we urge you to seize the opportunity to exercise your broad authority to take decisive action to restore to California's consumers the additional overcharges they are owed. Insurers should not be allowed to walk away with half the money on the table. Nor should they be permitted to continue charging excessive rates."

Read Consumer Watchdog's July 30, 2021 letter to Insurance Commissioner Lara proposing a plan to stop insurance company profiteering and get Californians their money back:



Consumer Watchdog is a non-profit, non-partisan organization. Its founder wrote Proposition 103 and its advocates have worked with Insurance Commissioners and other public officials to defend and enforce the law since its passage in 1988. The initiative has saved Californians over $153 billion on their auto insurance alone since it took effect.

Read Consumer Watchdog's June 29, 2021 analysis of how auto insurance companies overcharged motorists by an estimated $5.5 billion in 2020 alone ? and how the top 15 companies only refunded $1.9 billion, earning them four times the legal profit limits set by state law: https://www.consumerwatchdog.org/insurance/auto-insurance-companies-overcharged-california-motorists-55-billion-during-first-year

Read how Proposition 103 protects Californians against overcharges, requiring all auto, home and business insurance companies to maintain fair rates and to open their books and justify requests for rate changes before they can take effect:  https://www.consumerwatchdog.org/insurance/insurance-reform-proposition-103-saved-ca-drivers-154-billion-report-says

Read Consumer Watchdog's April 23, 2020 letter to Commissioner Lara urging him to place a moratorium on approval of any new rate increases until the end of the pandemic: https://www.consumerwatchdog.org/sites/default/files/2020-04/2020-04-23%20Ltr%20to%20Lara%20re%20Moratorium%20final.pdf

From the California Department of Insurance web site:

Read the Insurance Commissioner's official bulletins ordering insurance companies to refund excessive premiums to policyholders: http://www.insurance.ca.gov/0400-news/0100-press-releases/2021/release030-2021.cfm

Reports filed by insurance companies on how much they have voluntarily refunded their customers can be found here: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0100-applications/rsb-forms/2020/2020-3-submissions/index.cfm

SOURCE Consumer Watchdog

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News published on 30 july 2021 at 13:59 and distributed by: