California Prods Insurers For 60-Day Grace Period On Premium Payments

California is pressing all insurers to give policyholders "at least" a 60-day grace period from insurance premium payments.

Insurance Commissioner Ricardo Lara issued a notice Wednesday requesting the premium grace period and asking insurers not to cancel policies for nonpayment of premium. Lara cited the "novel coronavirus (COVID-19) public health emergency."

The notice follows Gov. Gavin Newsom's State of Emergency declaration to make additional resources available to fight the broader spread of COVID-19. Lara's notice is directed to all admitted and non-admitted insurance companies that provide any insurance coverage in California including, life, health, auto, property, casualty, and other types of insurance.

“Now is the time to come together to help consumers weather this unprecedented period of uncertainty, and that includes helping policyholders maintain their insurance coverage if they are unable to pay their premiums,” Lara said in a news release. “We must do everything we can to ensure that consumers and their families maintain insurance coverage protection during this public health pandemic.”

Lara is also requesting that all insurance agents, brokers, and other licensees who accept premium payments on behalf of insurers take steps to ensure that customers have the ability to make prompt insurance payments, if and where possible.

This includes alternate methods of payment, such as online payments, to eliminate the need for in-person payment methods in order to protect the health and safety of both workers and customers.

Help With Auto Insurance

In a separate notice, Lara requested the assistance of all automobile insurers, producers, and other licensees transacting automobile insurance in California.

The California Department of Motor Vehicles recently asked state law enforcement to exercise discretion for 60 days in their enforcement of driver license and vehicle registration expirations beginning March 16, in order to have at-risk populations, including seniors and those with underlying conditions, avoid required visits to DMV field offices.

To achieve this objective, Lara called on auto insurers to refrain from using the expiration of policyholders’ drivers licenses or vehicle registrations for 60 days, from March 16, 2020, for any of the following reasons:

• To affect a driver’s ability to secure and maintain auto insurance coverage;
• To affect a driver’s eligibility for a Good Driver discount;
• To determine eligibility for a California Low Cost Automobile policy;
• To impact the rates charged to any driver.

“The evolving COVID-19 pandemic continues to test all segments of our communities, including motorists,” Lara said. “While we address this evolving crisis, Californians should not have to worry about driving with an expired license or losing their insurance coverage and driver discounts during this extraordinarily challenging time.”

This second notice regarding driver license and vehicle registration expirations will be reevaluated at the end of the 60-day period, the department said.