The Wall Street Journal is reporting that the California regulator is requiring it’s auto insurers to provide bigger refunds on driver premiums.
The insurers have until April 30th to come up and deliver their plan on how they will offer the refunds for the premiums in place during the March to September, 2020 period. According to the report, California Insurance Commissioner Ricardo Lara believes that the existing refunds should have been double of what was actually provided. The decision comes as fewer travelers and fewer total miles on California roads due to the pandemic, reduced the number of claims payed out. The California regulator has reported that the various types of claims have fallen 40% between March and September.
State Farm is the first to act with a statement that it will return $400 million to California auto policyholders, while others are reviewing their options and analyzing their data to take into account the increase severity of claims, which impact the insurers loss ratio, before making a decision.
Read the WSJ article here https://www.wsj.com/articles/california-says-car-insurers-overcharged-during-the-pandemic-11615483801