Auto insurers raking in enormous sum at drivers’ expense – report


Although the majority of Californians have driven less car in the past year, most auto insurance companies operating in the state continued to charge pre-pandemic fees, making about $ 5.5 billion in profits, a new analysis by Consumer Watchdog found.

The consumer advocacy group found that the newly released 2020 data suggested that while accident damage was decreasing because most vehicles were left parked, insurers were unable to cut tariffs accordingly. As a result, the average net return for insurers was more than double that of California law last year.

Consumer Watchdog also pointed out that California Insurance Commissioner Ricardo Lara has issued four bulletins since April 2020 instructing insurers to reimburse excessively high fees. In March 2021, Lara gave insurers a deadline of April 30, 2021 to repay outstanding refunds from last year, and companies were even allowed to calculate for themselves what they owed their customers.

But the top 15 auto insurers – which represent 70% of the market – only paid back about $ 1.9 billion for 2020.

“Asking insurers to calculate their own reimbursements has not resulted in consumers getting what they are due. Insurance companies are sticking to billions of dollars for drivers that should help Californians get back on their feet if we get out of the pandemic. “Carmen Balber, executive director of Consumer Watchdog, said,” The insurance commissioner needs to be out of the companies require that they refund previous surcharges in full and with interest, and ensure that tariffs are not inflated in the future. “

Consumer Watchdog has stated that data on markups is not yet available for 2021, but notes that the pandemic continues to affect the economy and traffic behavior. Accident rates are still not what they were before March 2020, the group pointed out that insurers owe consumers “billions more” for the first half of 2021.

Consumer Watchdog also mentioned that auto insurers have paid back less than $ 100 million so far for 2021.