As Insurance premiums are due and many people are behind on their payments, states have had to adapt to the likelihood that their clients may not be able to pay their premiums. Many states have issued delays on these payments for up to 60 days. Some states have gone a step above that.
California, known for being one of the most difficult insurance states, has taken the stance that insurance providers should be refunding their clients. Ricardo Lara, the Insurance Commissioner has requested that providers “refund some March and April premium payments to policyholders for a range of personal and commercial lines due to COVID-19.”
The notice ordered insurers to “make an initial premium refund for the months of March and April” to affected California policyholders as quickly as practicable and no later than within 120 days.” Affected industries include, medical malpractice, commercial liability “any other line of coverage where the measures of risk have become substantially overstated as a result of the pandemic.”[1]
These refunds come as a result of the auto insurance industry doing the same for lack of payments thanks to the wave of furloughs affected by the economy. In some fields, companies are also considering credits on what they paid in March and April. This could mean insurance companies could be having trouble making any money at this time, despite the increased demand for new insurance.
Each state has their own way of making sure people can keep their insurance in this extremely trying time. Consult your state’s laws or rulings to determine what you need to do in relation to your clients’ needs.
[1] https://www.businessinsurance.com/article/20200413/NEWS06/912334009/California-orders-insurers-to-pay-back-premiums-due-to-virus?utm_campaign=BI20200416MarketPulse&utm_medium=email&utm_source=ActiveCampaign&utm_campaign=BI20200416MarketPulse&utm_medium=email&utm_source=ActiveCampaign