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Non-Payment of Fees will not Leave you Uninsured During the COVID-19 Pandemic

Although usually the failure to pay the insurance premium would imply that the insurance company canceled your policy, during the pandemic by COVID-19 it will remain in force. This was ordered by the commissioner of the California Department of Insurance, Ricardo Lara.

According to the official’s order, all insurance companies, admitted and not admitted to the Department, that provide insurance coverage in the state must grant their clients a grace period of 60 days for the payment of their policies.

In general, insurance companies grant a maximum period of 30 days for the client to cover the payment of their premium; however, this period may vary from one company to another, so you must consult your policy to have accurate information.

Grace Period

Although Commissioner Lara’s decision to grant a grace period was made public on March 18 and this benefit could be considered to have expired, the official stated that it could be extended for up to 90 days after the “status of emergency” in California by COVID-19; therefore, the insurance policies would remain in force even though the clients could not pay the premiums during these months.

If your insurance company does not abide by this decree and cancels your policy, seek the appropriate legal advice. At Farahi Law Firm we are always available to discuss your options and legal rights.

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Other Benefits as a Consumer

It’s worth remembering that the California Department of Insurance decision also included that all companies return the paid premiums, at least during March, April, and May if the “Stay-at-home” instructions continue. This applied to:

  • Private passenger car insurance
  • Commercial auto insurance
  • Workers compensation
  • Multiple business risks
  • Commercial responsibility
  • Medical malpractice
  • Any other line where the risk of loss has decreased due to the pandemic

Besides, Commissioner Lara asked insurance companies to provide their clients with:

  • Premium credits
  • Premium reduction
  • Premium adjustment

All this, at the latest in August 2020; as it seeks to provide substantial financial relief to consumers and businesses during the COVID-19 pandemic.

Changes in Procedures for COVID-19

Also, Lara asked insurance companies to refrain from using the expiration of the driver’s licenses and driver’s records of their insureds to avoid mandatory visits to the California Department of Motor Vehicles (DMV) offices.

Since March 16, insurance companies stopped taking into account the validity of the driver’s license to:

  • Determine the driver’s ability to secure and maintain auto insurance coverage
  • Define a driver’s eligibility for a Good Driver discount
  • Determine eligibility for a California low-cost auto policy
  • Affect the rates charged to any driver

Changes in procedures for COVID-19

Also, Lara asked insurance companies to refrain from using the expiration of the driver’s licenses and driver’s records of their insureds to avoid mandatory visits to the California Department of Motor Vehicles (DMV) offices.

Since March 16, insurance companies stopped taking into account the validity of the driver’s license to:

  • Determine the driver’s ability to secure and maintain auto insurance coverage
  • Define a driver’s eligibility for a Good Driver discount
  • Determine eligibility for a California low-cost auto policy
  • Affect the rates charged to any driver

Contact Farahi Law Firm

If your insurance company does not abide by this order, you must seek legal advice immediately. Remember that as a consumer you have rights. At Farahi Law Firm we are here to support and guide you throughout the entire process.

Call us for a free consultation on your case!

(844)-244-2955