California Insurance Commissioner Ricardo Lara issued an official notice to insurers regarding consumers who have been reporting issues obtaining auto insurance coverage.
The California Department of Insurance continues to receive numerous complaints from consumers who have been having issues obtaining auto insurance coverage, according to an announcement of the notice.
“These alleged passive-aggressive tactics by insurance companies to slow down drivers’ access to coverage are unacceptable, dangerous, and will not be tolerated,” Lara said in a statement. “I am taking action today to ensure these insurance companies are acting according to the law and giving drivers the coverage they are paying for at the rate they qualify for. We will continue to monitor the situation and take any and all steps necessary to protect California consumers.”
The consumer complaints that the CDI received were regarding waiting periods, questionnaires, and other practices instituted by auto insurers the department believes could be in violation of existing California law, including various provisions of Proposition 103, resulting in barriers for otherwise qualified drivers to secure and maintain auto insurance.
Auto insurance companies in California are required to submit complete rate applications to the insurance commissioner for review and prior approval before implementing any change to existing rates. These complaints reportedly revealed that some insurers may be taking actions that are not a part of the underwriting guidelines they have previously filed with the department. Before implementing new practices, like using questionnaires or different filing instructions, carriers must file those guidelines with the CDI.
Auto insurance companies in California also are required to offer insurance to all persons who qualify as “Good Drivers.” Those who have been licensed for at least three consecutive years, have no more than 1 point on their driving record and were not principally at fault as the driver in a motor vehicle accident that resulted in bodily injury or death of any person.
The complaints from consumers claim that some insurance companies may not be offering “Good Driver” discounts for all who qualify and may be imposing application requirements that are unrelated to set eligibility factors.
Lara’s action sets the stage for future enforcement actions, if warranted.
This article was originally published by Insurance Journal.