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Consumer Advocates To Appeal Home Insurance Refund Order

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Sacramento, CA — Consumer advocates will ask the California Supreme Court to overturn an appeals court ruling they claim undermines the state’s ability to order billions of dollars in insurance company refunds.

On Friday, a San Diego-based state appeals court rejected a California insurance commissioner’s finding from 2016 that State Farm’s California subsidiary was overcharging on its homeowner’s insurance rates. Dave Jones, who was insurance commissioner at the time, ordered the company to refund more than $100 million to its California policyholders, a decision reversed by the appeals court.

That decision will also imperil current Insurance Commissioner Ricardo Lara’s order that insurance companies refund as much as $3.5 billion they overcharged California motorists who during the coronavirus pandemic significantly curtailed their driving due to stay-at-home orders last year, say the Consumer Watchdog group. They assert that the ruling undermines the 1988 voter-approved ballot proposition, which created California’s elected insurance commissioner and has allowed the commissioner to reject proposed rate increases and order refunds.

The three-judge panel of the 4th Appellate District Court of Appeal ruled “that the retroactive rate and refund were impermissible” under its interpretation of the powers imposed by Proposition 103. The State Supreme Court has already twice upheld the commissioner’s authority to order refunds. State Farm said it was pleased with the court’s decisions on both the retroactive refund and its rejection of the way Jones determined how much he believed the company owed.

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