COVID Regulatory Response: Cut Car Insurance Rates

Which state regulator: California  Insurance Commissioner

The California Insurance Commissioner Order: Bulletin 2020-3

Why cut car insurance rates?

• projected loss exposures of many insurance policies have become overstated or misclassified.
• rates are calculated on miles driven, and miles are not being driven

Are other insurance lines also having rates cut in the order? Yes:

• 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 substantiallyoverstated as a result of the pandemic

What information will carriers need to report to the regulator?

• Percentage of refund applied
• Aggregate premium prior to, and subject to, application of refund
• Aggregate premium refund
• Average premium before and after refund
• Average percentage of refund, applied to each policyholder
• Number of in-force policies
• Number of policyholders receiving refund

Sacramento Bee | California orders car insurance rebates due to coronavirus. Many carriers already cut rates