Insurance Companies in California are Required to Refund Premiums to Protect the Public from Uninsured Motorists During COVID-19 

Insurance Companies During Covid-19

On Friday. July 10, California Insurance Commissioner Lara announced that insurance companies must issue refunds for the months of March and April to policyholders, until further notice. This order to insurance companies, which you can read here,  was commissioned due to the fact that there has been an overall decrease in car accidents in California during the COVID-19 stay at home order issued back in March by Governor Newsom.

The stay at home order, recently extended to at least July 15, required the closure of non-essential businesses, resulting in thousands of people losing their employment and causing Los Angeles’s highways and streets to become relatively empty – much to the shock of locals. Since many drivers are now off the roads, the state ran the risk of seeing an increase of drivers terminating their auto insurance because they can’t afford it during this pressing time.

The possibility of an increase in the number of uninsured motorists in Los Angeles could significantly affect insurance claims in personal injury cases caused by car accidents. Commissioner Lara’s order could be a solution to keep drivers safely insured during this time of need.

L.A. Traffic During Stay at Home Ordinance

With nowhere to go, most daily commuters are giving driving a rest only heading on the road to partake in essential living tasks, such as grocery shopping. This reduced traffic has resulted in greater freedom on the road and those who are driving take liberty into their own hands. According to a study conducted by the L.A. Department of Transportation, drivers have increased their speed by an average of 30 percent.

While the number of accidents has decreased during this shutdown because of the reduction of drivers on the road,  the severity of the accidents may increase because of the higher speeds of vehicles on the road.

Despite this increase in speed, there appears to have been a decrease in car accidents throughout the state of California. A special report by the Road Ecology Center at UC Davis found that “traffic volumes were up to 60 percent lower on certain highways after the order compared to a similar period prior to the order, which may account for the reduced number of collisions.” The number of accidents and fatalities in California have been cut in more than half since the ordinance took effect.

Insurance Companies Planned to Save Billions While Only Giving Customers Back a Couple Bucks a Month

Since people are driving less and collision rates have decreased, some insurance companies had already taken the initiative to offer COVID-19 payback programs or relief packages during this time. Some of these programs included Allstate’s Shelter in Place Payback program which planned to give customers 15 percent money back on their regular premium payments for April and May.

The State Farm Good Neighbor Relief Program, on the other hand, planned to “offer a credit of about 25 percent of premium for the time period March 20 through May 31.” These types of programs were designed to offer minimal financial support and relief for auto insurance customers while maximizing profits.

This was a shrewd move by auto insurance companies, which were expecting to save up to 80-85 percent in paid auto accident claims while offering only 15-25 percent money back on premiums. They were expecting to save billions of dollars as a direct result of decrease in vehicle accidents and personal injury claims, so what they were planning to give back to their customers was truly minimal.

Commissioner Lara’s order to insurance companies is a step in the right direction, as the insurance companies were aiming to maximize profit while seeming to be well-intentioned and good-willed. The state of California is ordering that they provide full refunds for the months that people have been off the roads which so far include March and April. The Commissioner will provide updates on this notice to insurance companies should the stay at home order last past May.

These insurance companies have 60 days from the date of this notice to report their intent of action to issue these refunds and a total of 120 days from the date of this notice to complete the refunds for these months. Some people might not see these refunds until as late as July, depending on the speed at which insurance companies can issue this support to their customers.

Regardless of the speed at which auto insurance companies process these refunds, experts recommend that people should not cancel their auto insurance at this time, since having a lapse in auto insurance could increase premium rates when seeking coverage once again. This is not to mention that it might compromise or complicate a driver’s case should they find themself in a vehicle accident.

What Happens in the Case of a Car Accident During COVID-19

Although there are many less people on the road, accidents resulting in personal injuries still happen and people with personal injuries might be feeling overwhelmed about how to pursue their claims during this time. While jury trials are delayed as California Courthouses throughout the state have closed their doors and are only handling essential and/or emergency tasks, personal injury claims and litigation can move forward without much delay. Although the Los Angeles Superior Court announced its closure to the public as of March 23, new cases can be filed online and litigation of these claims may commence with minimal delay.

Experienced personal injury attorney Allen Patatanyan from the Los Angeles based law firm West Coast Trial Lawyers stated,“Civil litigations should still expect their cases to move forward at a normal pace until trial, which are currently being continued by three to six months.” Despite the limitations they are currently facing, some personal injury law firms continue to service their clients remotely, actively prosecuting cases and accepting new clients. Mr. Patatanyan also explained, “Courts limited operations have almost no effect on general litigation activities, such as discovery and motion practice. Attorneys still engage in written discovery, virtual depositions, telephonic hearings, and even virtual mediations.”

Some clients who need medical attention due to the personal injuries they sustained from an accident are fearful of the risk of being infected with COVID-19 when visiting their medical providers. Personal injury law experts recommend that victims continue receiving medical treatment and updating their medical records as they are essential to building a strong case. Some medical practitioners have transitioned to providing remote medical attention (telemedicine) via telephone or virtual/telehealth video. If a person is unable to receive medical attention for their injuries, experts recommend logging their injuries, symptoms, and progressions themselves in a journal.

While COVID-19 and the current shutdown has impacted personal injury claims, people who suffer serious injuries as a result of auto accidents have options and should consult experienced personal injury attorneys to protect their rights and obtain fair compensation.

Author Bio - Sunil Kumar is a passionate blogger and write on digital marketing, search engine optimization, make money
online tips, affiliate marketing, social media, blogging, wordpress etc. He is a software developer and penetration 
tester and running a website Blogging Hub.
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