American Property Casualty Insurance Association: Let the California Market Work

WASHINGTON, April 14 -- The American Property Casualty Insurance Association issued the following statement by President and CEO David A. Sampson regarding the California Department of Insurance's call for premium reductions for six lines of personal and commercial insurance.

"Over the last two weeks, insurers have announced billions of dollars in premium rate relief to their policyholders.

"Insurance is a data driven industry. Rates are continuously adjusted based on losses and claims costs. If regulators allow insurers flexibility, private competitive markets will work to the benefit of consumers.

"For example, the impact of COVID 19 on driving patterns are reflected in the data some companies are seeing on crash frequency and severity and a number of companies have already responded. Some commercial lines policies, such as workers compensation, are audited each year to reflect changes in risk and claims so premiums are adjusted at that time.

"Now is not the time for arbitrary calls for rate decisions. We urge all stakeholders to support flexibility in the marketplace. California has the most complex regulatory structure in the nation. The Department should be providing guidance to companies that are trying to implement premium reductions within the confines of Proposition 103.

"There are a number of ways that auto and commercial insurers are currently helping customers manage costs. During this extraordinary crisis, companies are voluntarily offering arrangements for:

* Working with closed commercial businesses to provide premium benefits that reflect the current environment.

* Refunds and discounts for drivers who are logging less miles during shelter-in-place orders;

* Flexible payment solutions for families, individuals, and businesses--providing additional time to make payments;

* Waiving insurance premium late fees for families, individuals, and businesses;

* Pausing cancellation of coverage for personal and commercial lines due to non-payment and policy expiration, which includes personal auto, commercial auto, homeowners, business owners, renters, boat, motorcycle, condo, mobile home, personal umbrella, and landlord.

* Suspending personal auto exclusions for restaurant employees who are transitioning to meal delivery services using their personal auto policy as coverage;

* Adding more online account and claims services for policyholders;

* Shifting more resources to anti-fraud and cyber security units, in recognition of the bad actors who will prey on victims during times of crisis; and

* Adopting new technologies and remote solutions to minimize any interruptions in service, collision repair, and claims handling, such as using virtual inspection technology to complete damage inspections.

"Individuals going through extraordinary life circumstances should call their insurer or agent to discuss their options.

"Only the federal government can be the bridge for a crisis of this proportion. APCIA supported the recently enacted federal assistance programs that will deliver aid directly to vulnerable business communities, particularly affected small businesses. APCIA also joined a broad coalition of our customers to advance the COVID-19 Business and Employee Continuity and Recovery Fund as an additional tool to keep businesses solvent and employees working. We will be advocating alongside them for inclusion of the fund in the next phase of economic stimulus to speed payments to businesses in need."

* * *

The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions--protecting families, communities, and businesses in the U.S. and across the globe.