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Commissioner Requests 60-Day Grace Period To Pay Insurance Premiums

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Sacramento, CA – In the wake of COVID-19 related financial challenges, state officials are asking insurers to grant customers a grace period.

On Wednesday, California Insurance Commissioner Ricardo Lara issued a notice in response to the federal and state health emergency declarations in place with the aim of preventing insurers from canceling insurance policies for the next 60 days. He specifically asked all insurance companies to give their customers at least that amount of a grace period to pay their premiums.

In the notice, Lara stated, “The novel coronavirus (COVID-19) outbreak and emergency public health measures by state and local leaders are contributing to widespread interruptions and loss of income for many California consumers and businesses. This request is directed to all admitted and nonadmitted insurance companies that provide any insurance coverage in California including, life, health, auto, property, casualty, and other types of insurance.”

In addition, to protect the safety of workers and customers, Lara is requesting that all insurance agents, brokers, and other licensees who accept premium payments on behalf of insurers take steps giving customers the ability to provide prompt payments through alternate methods such as online, eliminating the need for in-person payment methods.

“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 pointed out. “We must do everything we can to ensure that consumers and their families maintain insurance coverage protection during this public health pandemic.”

In light of a request enacted Monday by the state’s Department of Motor Vehicles (DMV) for state law enforcement to exercise discretion for 60 days regarding driver license and vehicle registration expirations, the commissioner issued a related notice specifically to all automobile insurers, producers, and other licensees transacting automobile insurance in California.

in order to help at-risk populations, including seniors and those with underlying conditions, avoid visiting DMV field offices over the next 60 days, the notice requests them through May 15 to refrain from using policyholders’ driver’s license or vehicle registration expiration dates.

It specifically asks that expiration dates not considered in determining a driver’s ability to secure and maintain auto insurance coverage or remain eligible for a Good Driver discount, nor to determine eligibility for a California Low-Cost Automobile policy or impact the rates charged to any driver.

As Lara put it, “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.”