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Best Lawyers | Best Law Firms | U.S. News & World Report | 2020

Sticker Shock for California Drivers

On Behalf of | Oct 20, 2020 | Motor Vehicle Accidents |

The coronavirus pandemic has led to empty streets once brimming with people, stores packed with customers, and traffic jammed on to the roads of California. With workplaces encouraging telecommuting and businesses temporarily closed, the need to leave the house and drive diminished.

As predicted, fewer motor vehicles resulted in fewer accidents throughout the state. UC Davis researchers backed up that theory in a study that revealed collisions were cut in half. Back in March, getting insurers to lower rates to reflect the unprecedented environment would be unlikely.

Fewer Reasons to Drive Reduced Policy Rates

That’s when California Insurance Commissioner Ricardo Lara took matters into his own hands and mandated that insurance providers offer discounts from March through June of 2020. Consumers breathed a sigh of relief with the knowledge that they had a bit of financial assistance during difficult times. In total, the average of a four percent discount saw California drivers achieve savings of more than $1 billion.

The pandemic continues with some “cabin-fevered” California residents leaving the house and getting behind the wheel. Yet, the numbers are still nowhere near pre-COVID traffic as the state economy has not reopened. Still, many insurance companies are returning to their regular rates, hoping that their customers appreciated the discounts, even if the decision was not theirs.

However, some policy providers may be looking to get back some of the money that they lost. Accidents and traffic violations were once the fastest way to raise rates. The end of June saw customers, many with good driving records, opening their insurance bill to see not only the end of the discount but significant increases for the remainder of the year.

Lara announced that he would not force insurers to reduce rates, but encourage them to study statistics with attention to every detail. For now, drivers with larger bills should continue to avoid accidents and other problems. They should also reach out to their provider for possible rate reductions.