Premium Refunds for Drivers and Businesses
- Shirley Gordon
- Practice Leader, Personal & Family Office Risk Management
On April 13, 2020, the Commissioner of the California Department of Insurance (DOI) ordered insurance companies to refund premiums to consumers and businesses affected by the COVID-19 emergency.
G2 continues to monitor how these changes will affect you and your business and we are in communication with insurance carriers about their responses. Here are our takeaways from the initial bulletin:
This order applies to the following insurance coverages:
- Commercial Auto
- Commercial Liability
- Commercial Multi-Peril
- Medical Malpractice
- Private Passenger Auto
- Workers Compensation
- And any other coverage where the measures of risk have become overstated due to the pandemic.
Insurance companies can offer a premium credit, reduction in premium, return of premium or other adjustments.*
Premium refunds must be issued to commercial insureds for March and April as quickly as practicable, but in any event no later than 120 days from April 13, 2020.
Insurers may take the following actions without obtaining prior approval of rates or rules by the DOI: Reclassification of exposures or reduction of exposures.
Each insurer shall provide each affected policyholder a notification of the premium adjustment and an explanation of the basis for the adjustment.
Insurers are also ordered to report to the DOI within 60 days, all actions taken and contemplated further actions to refund premium.
*IMPORTANT NOTE: Each insurance carrier may choose a different method of handling the Commissioner’s order so it will take some time to confirm their decision. Please consult your G2 advisor for details about your specific carriers.