Rebates to Your Auto Insurance

Dear Friends and Clients:

The efforts undertaken to slow the spread of Covid-19 have demanded significant changes in the daily behavior of all Americans.  Here in California, the state with the most registered vehicles in the country and the greatest number of fatal crashes annually, the shelter-in-place orders implemented in mid-March have had the effect of drastically cutting traffic accidents.  According to a report by the Road Ecology Center at the University of California, Davis, since the stay-at-home orders went into effect, “collisions and especially injury and fatality collisions have been reduced by half.”  The report goes on to explain that this reduction in crashes has resulted in a cost savings to the public of approximately $40 million per day, or $1 billion since the order went into effect.

This good news goes one step further.  On April 13th, the California Insurance Commissioner issued an order requiring auto insurance carriers to issue retroactive rebates to policy holders on the ground that projected loss exposures of most policies have become overstated or  misclassified.  The Commissioner has not yet clarified the methodology for determining rebate amounts, but has encouraged insurers to take action “without prior approval…by reassessing  the  classification  and  exposure  bases  of  affected  risks  on  a  case-by-case  basis.”

So, if you haven’t already received a rebate from your auto insurance carrier, you likely will.  And if you believe that your rebate amount is not commensurate with your true reduction in driving, consider contacting your insurance carrier and asking for a supplemental amount.  Be sure to cite the requirements of California Insurance Commissioner Bulletin 2020-3 in your communication.

We hope you are all staying safe and healthy, and we look forward to serving your legal needs as we slowly but surely emerge from this pandemic.