Californians paid billions more than necessary on auto insurance last year, according to new research, but three leading insurance companies have not adequately refunded them, according to Insurance Commissioner Ricardo Lara.
On Wednesday the state Department of Insurance said Allstate, Mercury Insurance and CSAA, have the “greatest gap between what they initially refunded drivers and what they should have refunded to provide proper premium relief.”
“On behalf of consumers, I am out of patience.” Lara said in a statement. “These insurance companies have 30 days to tell us once and for all how they are going to make it right before we take further action.”
The refunds stem from Lara’s 2020 order for insurance companies to issue premium refunds or credits to customers who were driving less due to stay-at-home orders issued during the Coronavirus Pandemic.
“Millions of Californians stayed home to save lives. We drove less, lowering risks for other drivers on the road,” Lara said in a 2020 statement. “Because of that, I ordered insurance companies to return money to drivers.”
The action has saved consumers more than $2.4 billion in premium relief to date - the most refunded to drivers in the United States, according to Lara.
This March, as the pandemic continued, the California Department of Insurance analyzed repayments and found that, from March 2020 to September 2020, insurance companies returned an average of nine percent of auto premiums.
“But the Department’s analysis found they should have refunded nearly double that amount —17 percent — over the seven-month period,” according to an Oct. 6 statement.
Allstate, Mercury Insurance and CSAA, cover one in five Californians, Lara said, and are the three insurance providers who could face serious fines if they do not issue more refunds or premium relief.
The companies have 30 days from Oct. 5 to respond to the allegations that they have continued to overcharge customers.
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