Buckle your seatbelts, this past year just got even more bumpy.
According to a new report by Consumer Watchdog, a nonprofit that advocates for consumer interests, finds that insurance companies over-charged California drivers by $5.5 billion during the pandemic.
Fewer cars on the road meant fewer accidents and 2020 data shows that accident claims plummeted as cars idled in driveways, but insurance companies failed to adjust their rates as a result.
"We saw the reduction in claims payments was dramatic," said Carmen Balber, executive director of Consumer Watchdog. "Insurance companies paid more than 11% less in 2020 than they did on average in the prior year."
The report found that insurance companies' average return on net worth in 2020 was more than twice what is acceptable by state.
Since April of last year, Insurance Commissioner Ricardo Lara has directed insurance companies to refund overcharges. In March this year, he set a deadline for April 30. But because the companies were allowed to calculate themselves what they owe, the top 15 auto insurance companies have only repaid approximately $1.9 billion, less than half.
"Many of us did receive either a premium credit or even a small check in the mail from our insurance companies saying, ‘Hey! Driving is down because of COVID-19, we’re giving you a refund,’" said Balber.
But it’s still frustrating knowing that billions have gone unpaid.
Balber feels that Lara should take better charge, instead of asking nicely for the money to be refunded.
He needs to, "require companies to come in, chew up the books, and return the billions that consumers are still owed," she said.
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