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Premium Refunds due to COVID-19?

You may have read in the news that California’s Insurance Commissioner, Ricardo Lara, on Monday, April 13, issued an order to insurers to make an initial premium refund for the months of March and April to certain policyholders adversely impacted by COVID-19. The order further specifies six specific applicable coverage lines:

  • Private passenger automobile
  • Commercial automobile
  • Workers’ compensation
  • Commercial multiple peril
  • Commercial liability
  • Medical malpractice

Many of our clients are wondering how this Order may impact their policies and their payment of premiums.

It is VERY IMPORTANT to note, that the Order issued Monday is addressed to insurance carriers (not brokers or agents) —and requires that they provide the Department of Insurance with their plans, in writing, within 60 days from the date of the order (due: June 12, 2020) and provides 120 days for the insurance carrier to provide notification to affected insureds. That date is August 11, 2020. Which means you should be hearing directly from your insurance carrier by August 11, if in fact your policy is affected by this order.

We encourage your patience as we await each insurance carriers’ guidance. We recommend that you continue to pay your insurance premiums on time. Some insurance carriers have extended their grace periods for cancellation for non-payment of premium, but these are simply extensions of due dates, not premium forgiveness.

Of course, we ask that you contact our office if you have experienced ANY substantial change in your business operations—so that we may appropriately advise you.

#businessinsurance #personalinsurance #covid19 #coronavirus