SACRAMENTO, Calif. — California's insurance commissioner has ordered some companies to refund premiums for March and April as the need for many consumers decreases because of the coronavirus pandemic.
Monday's order includes insurance premiums paid for workers compensation, medical malpractice and private and commercial auto policies. Insurance companies set rates based on risk.
But risk has changed because of the coronavirus. For auto insurance, fewer cars are on the road and that reduces collisions.
"With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss," said Insurance Commissioner Ricardo Lara.
Lara said the order will put money back in people's pockets when they need it most. The order could be extended if closures continue. (To read the full bulletin, click here.)
The order requires insurance companies to issue a "premium credit, reduction, return of premium, or other appropriate premium adjustment" before August 2020.
The order comes after Lara requested a 60-day grace period for people to pay their premiums so they aren't canceled because of nonpayment during the pandemic.
A representative from the American Property Casualty Insurance Association has not yet responded to Lara's order.
"I applaud efforts made by insurance companies to date that have offered grace periods and flexibility to consumers and businesses during this national emergency," Lara said. "We must do more to help our hard-working families and small businesses."
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Coronavirus Background
According to the CDC, coronavirus (COVID-19) is a family of viruses that is spreadable from person to person. Coronavirus is believed to have been first detected in a seafood market in Wuhan, China, in December 2019. If someone is sick with coronavirus, the symptoms they may show include mild to severe respiratory illness, cough, and difficulty breathing.
Currently, there is no vaccine; however, the CDC suggests the following precautions, along with any other respiratory illness:
- Avoid close contact with people who are sick.
- Avoid touching your eyes, nose, and mouth.
- Stay home when you are sick.
- Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
- Clean and disinfect frequently touched objects and surfaces using a regular household cleaning spray or wipe.
- Wash your hands with soap and water for a minimum of 20 seconds.
WHY HEALTH OFFICIALS ARE SO CONCERNED
Some people have compared the low overall death toll to the flu's high annual death toll in the United States as a reason not to be concerned about COVID-19, however, doctors and health officials are concerned for three main reasons:
- Some people have built up immunity to the flu, but few have immunity to COVID-19 version of coronavirus.
- Both the flu and COVID-19 are spread by droplets, but COVID-19 might be spread in the air. Scientists are researching exactly how COVID-19 spreads.
- The CDC recommends wearing cloth face coverings in public where social distancing measures would be difficult to maintain, like at a grocery stores or pharmacy.
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