Coronavirus Stimulus Check From Car Insurer: You May Get One If You Live In This State
California is among the few states to come up with not one, but two true stimulus checks under the Golden State Stimulus program. Now, the state is also working hard...
California is among the few states to come up with not one, but two true stimulus checks under the Golden State Stimulus program. Now, the state is also working hard to give some of its residents one more stimulus check. However, this money won’t come from the state, rather it could be a coronavirus stimulus check from your car insurer.
Why You May Get Coronavirus Stimulus Check From Car Insurer
Though several states are pushing car insurers to offer refunds, rebates and even cash to policyholders, one state that is showing more intent than others is California.
Many auto insurers made huge profits because of the driving slowdown last year due to the COVID-19 pandemic. Even now, many car owners are driving less than before because of the COVID-19 restrictions.
All this translates into more profits for the car insurers, and this is what many state authorities are opposing. The opposition from California is stiffer than others. California’s insurance commissioner, Ricardo Lara, has issued a warning to the auto insurance companies to refund excess premiums collected since the start of the pandemic, or face the consequences.
The warning, specifically, is for three insurance companies, which together cover a big part of the California auto insurance market. These insurance companies are: Allstate, Mercury and CSAA. Together these three companies cover about 20% of California drivers.
Lara alleges that these companies continue to charge pre-pandemic rates even if the policyholder is driving less than before. These companies now have been ordered to clear their plans within a month.
“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.”
Insurance Companies May Face Fine
Lara’s warning to the insurers is not without any official backing. The state law gives power to the insurance commissioner to ensure that premium calculation is on the basis of the driver’s safety record and miles driven. Those who fail to comply with the laws can be fined up to $10,000 per person overcharged.
As per the insurance department, the insurers who got the warning had the largest gap between the amount they refunded and the amount they should have refunded.
The California Department of Insurance estimates that auto insurers returned an average of 9% of the premium for March to September 2020, but they should have refunded about 17% for the same period.
The three companies now have less than a month to reply to the insurance department's concern. A letter from Lara’s office was sent to each insurer last week (Oct. 5). The letter states that the companies need to come up with a “complete response within 30 days of the date of this letter and will not grant any extensions of time to respond.”