California Orders Car Insurance Refunds for More Drivers

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Millions of California drivers are due refunds on their car insurance premiums, the state’s insurance commissioner said on Wednesday.

Commissioner Ricardo Lara said he is looking at all insurers, but ordered three companies in particular, Allstate, Mercury, and CSAA to calculate and distribute refunds to their customers. Lara’s office said those three companies cover about one in five California drivers. 

Refunds are owed, the commissioner said, because most people are driving less due to the pandemic. Car insurers have previously issued premium refunds that total $2.4 billion -- after some regulatory prodding, Lara said. But Lara believes Allstate, Mercury, and CSAA should pay back even more money.   

“New data shows these three insurance companies have the largest gap between what they did and what they should have done to provide further premium relief for their policyholders,” Lara said in a statement. “On behalf of consumers, I am out of patience.”

Lara gave Allstate, Mercury, and CSAA 30 days to respond to his Wednesday order. If they don’t comply, Lara said the companies will face legal action.  

In a statement to NBC Bay Area Responds, CSAA said, “We are in receipt of Commissioner Lara’s letter, are currently reviewing the request, and will respond within the time frame requested.” The company also stated that, in 2020, it issued policyholders refunds worth more than $137 million.

Allstate said, in a statement, “we were the first insurer to respond to decreased driving during the pandemic by returning $1 billion to drivers countrywide and always provide our customers affordable coverage.”  

In a statement, Mercury said it has “returned more than $175 million in premium to our California customers and continues to provide ongoing premium relief to hundreds of thousands of customers who are driving less as a result of the pandemic.” It added that, going forward, Mercury will continue to do the right thing for its customers, including offering some of the lowest rates in the state while continuing to provide award-winning service.”

If you’re driving less -- or not at all -- you don’t have to wait for a car insurance company to lower your rate. You can petition for a premium reduction at any time. Here’s a video we made to show you how.

NBC Bay Area graphic/ Chris Chmura.

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