that caps the profitability of insurance companies in the state. The average net worth of insurance companies was twice the amount allowed.
How does the California insurance law work?
Proposition 103, a law dating back to 1988, requires insurance companies to get prior approval before setting their rates. If their rates exceed the approved amount, they must refund the overcharges.
California State Insurance Commissioner Ricardo Lara began issuing bulletins already in April 2020, requiring insurance companies to refund consumers.
But Consumer Watchdog’s study shows that because the insurers were allowed to calculate what they owe themselves, the top 15 providers have only paid back $1.9 billion, less than half of what they owe.
, for example, reported a loss ratio that was 22.1% lower in 2020 compared to 2019, causing an overcharged of about $1.2 billion in 2020. But Consumer Watchdog says the company has only returned $613.4 million to consumers.
, 10 of the country’s largest insurance companies were named in a class-action lawsuit claiming they overcharged consumers living in the state during the pandemic. Like California, Nevada law prohibits insurers from charging excessive rates.
You might not be able to do much to get your car insurance overcharges refunded, but there are plenty of other ways to lower the cost of your coverage.
Improving your credit score and the amount you drive can affect your rates, but changing these things might require significant adjustments to your lifestyle. The best thing to focus on for quick savings is how you buy your insurance.
Paying upfront, raising your deductible, and bundling your coverages will save you money, but the best way to find
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"B.A., English Literature, MedAndrew Koole is an insurance writer who specializes in writing automotive news articles. Andrew’s mission is to create informative and instructional content car owners can use to reduce costs, master repair skills, and learn more about the automotive industry. Andrew has published over 600 articles for Jerry on topics ranging from automaker history to car insurance deductibles. Before joining Jerry in 2021, Andrew split his time between freelance writing in the entertainment and travel industries and creative writing in poetry and fiction. His writing is featured on a variety of arts and travel websites, including his own Ponytail Press.