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21st Century Insurance Premium Refunds for Covid-19 Period Class Action

In 2020, thanks to stay-at-home orders and other results of the Covid-19 pandemic, people drove far fewer miles, had fewer accidents, and made fewer auto insurance claims. The complaint for this class action alleges that “insurers selling personal auto insurance in 2020 collected $42 billion in excess premiums” because of this. It brings suit against 21st Century Insurance Company claiming that it has kept the excess amount and not returned it to consumers, as required by the California Insurance Commissioner.

The class for this action is all California residents who bought personal automobile, motorcycle, or RV insurance from 21st Century covering any portion of the time between March 1, 2020 and March 1, 2021.

The complaint quotes Bulletin 2020-3, issued on April 13, 2020 by California Insurance Commissioner Ricardo Lara, ordering a variety of types of insurers to make an initial premium refund for the months of March and April 2020. The complaint alleges that Lara later issued Bulletins 2020-4, which extended the time period for refunds if stay-at-home orders continue to “curtail[] driving behavior[.]”

Bulletin 2020-8 further extended the time period, on June 25, 2020, the complaint alleges, and again quotes Lara as saying, “Although California recently began to ease stay[-]at[-]home restrictions, depending on the type of insurance product and the claims experience of each insurer, current circumstances justify continuing premium relief to certain policyholders to reflect accurately the current risk of continuing premium relief to certain policyholders to reflect accurately the current risk of loss.”

Despite this, the complaint alleges, 21st Century gave customers refunds of around 15% for the months of March, April, and May only.

On March 11, 2021, Bulletin 2021-3 was issued, which the complaint claims “made it clear that California insurance companies … had not returned nearly enough premium to their customers to reflect the decreased risk of loss in 2020[.]”

It quotes the bulletin as saying that “based on extensive analysis of data received, the Department’s review of this loss data demonstrates the premium relief that insurance companies provided to their policyholders was insufficient, leaving consumers paying inflated premiums while they continued to experience reduced risk of loss.” It also quotes another line, later in the Bulletin, as saying, “Even worse, some insurance companies simply stopped returning premium altogether after June of 2020, although the pandemic still continues.”

Further, it refers to the California Automobile Assigned Risk Plan Advisory Committee as “recommend[ing] premium refunds to Low Cost Automobile policyholders of 30% for the months of March, April, and May, followed by a 15% premium reduction for the months of June and July, and a 20% premium reduction for August through December.”

The complaint shows a bar graph indicating the difference between “refund[s] to date” between March and September of 2020 and an “indicated additional refund” for the period.

The complaint refers to other studies on reduced traffic and estimates of refunds owed as well.

According to the complaint, then, 21st Century’s 15% refunds for March, April, and May 2020 only were inadequate.

Article Type: Lawsuit
Topic: Insurance

Most Recent Case Event

21st Century Insurance Premium Refunds for Covid-19 Period Complaint

February 7, 2022

In 2020, thanks to stay-at-home orders and other results of the Covid-19 pandemic, people drove far fewer miles, had fewer accidents, and made fewer auto insurance claims. The complaint for this class action alleges that “insurers selling personal auto insurance in 2020 collected $42 billion in excess premiums” because of this. It brings suit against 21st Century Insurance Company claiming that it has kept the excess amount and not returned it to consumers, as required by the California Insurance Commissioner.

21st Century Insurance Premium Refunds for Covid-19 Period Complaint

Case Event History

21st Century Insurance Premium Refunds for Covid-19 Period Complaint

February 7, 2022

In 2020, thanks to stay-at-home orders and other results of the Covid-19 pandemic, people drove far fewer miles, had fewer accidents, and made fewer auto insurance claims. The complaint for this class action alleges that “insurers selling personal auto insurance in 2020 collected $42 billion in excess premiums” because of this. It brings suit against 21st Century Insurance Company claiming that it has kept the excess amount and not returned it to consumers, as required by the California Insurance Commissioner.

21st Century Insurance Premium Refunds for Covid-19 Period Complaint
Tags: Auto Insurance, Excessive Premiums, Incomplete Refund, Insurance, Unjust Enrichment