Insurance Payments in a Pandemic

Most insurance companies unveiled national advertising campaigns in March 2020, promising to “pause” all policy cancellations or expirations for at least a month due to non-payment of premiums. Many continued this policy, stating that insureds simply had to ask to have their insurance payment plan extended during COVID-19.

Insurance companies did not do this out of the goodness of their hearts. In most states, the state insurance commissioner issued directives asking or requiring insurance companies to do exactly this. The federal government similarly issued regulations for policies governed by ERISA, extending the deadlines for appeals until after the pandemic ends.

Despite the state and federal mandates, and their own advertising, insurers have not all followed these requirements.  Many insurance companies did in fact still cancel or allow policies to lapse in the first month of the pandemic.  Many more put the onus on their insureds to reach out and request help, despite promises that all such extensions would be “automatic.”  Here is a summary of the positions taken by some of the major insurance companies:

AIG:  for life and health insurance customers only, extended grace periods until the end of the pandemic is declared.

Allstate: provided a 15% refund on personal auto policies in April, May and June 2020. Paused non-renewals due to nonpayment during the pandemic. Announced payment plan enabling customers to choose to delay two consecutive premium payments with no penalty.

American Family Insurance: returned 10% of auto premiums only between July 2020 and March 2021.

Farmers:  stated in numerous ads and social media posts that it would automatically suspend any policy cancellations or expirations due to non-payment of premium between March 31 and May 1, 2020.

The Hartford: 15% payback on auto insurance premiums in April and June, 2020, and temporarily suspended late fees and cancellations for non-payment for auto policies only.

Liberty Mutual and Safeco:  waived all late fees and cancellations/expirations automatically for customers with overdue payments between March 23, 2020 and June 15, 2020. Instituted 15% refund on two months of auto premiums in April 2020.

Nationwide: one time premium refund of $50 on auto policies.

Progressive: waived all late fees and cancellations/expirations automatically for customers with overdue payments between April 8, 2020 and May 15, 2020. Credited auto insurance customers with 20% refund on premium in May 2020.

State Farm:  in April 2020 announced Good Neighbor Relief program, providing credits to auto insurance customers, and in May cut auto rates in every state.

Travelers: waived all late fees and cancellations/expirations automatically for personal lines customers with overdue payments between March 26, 2020 and June 15, 2020.

USAA: waived all late fees and cancellations/expirations automatically for personal lines customers with overdue payments til June 17, 2020. Provided a 20% credit for two months of premiums for auto insurance customers.

Meanwhile, here are the orders issued by the insurance commissioners on the West Coast:

California:  The California Insurance Commissioner issued a Notice on March 18, 2020 asking all insurers to halt policy cancellations and expirations due to non-payment of premium for 60 days. Please see that HERE  On April 13, 2020, the Commissioner ordered all insurance companies to refund premiums to drivers and businesses affected by the pandemic. Click HERE to see this. He extended both orders for another 60 days on May 15, 2020. You can see this information HERE.

Oregon: The Oregon Division of Financial Regulation issued emergency orders that required all insurance companies to extend automatic grace periods for premium payments, postpone cancellations and nonrenewals, and extend deadlines for reporting claims. These extended from March 25, 2020 through May 28, 2020.  On May 28, 2020 Oregon altered its order to require a 60-day grace period for health and long term care during which claims would be paid for 30 days; a 90-day health, life and disability grace period during which all claims would be paid; and upon customer request, a 60 day grace period during which claims would be paid.  Oregon has issued fines against Allstate Insurance for cancelling or non-renewing 84 policies during the  pandemic period of March 25, 2020 to September 20, 2020.

Washington: In Washington, the Insurance Commissioner ordered all property and casualty insurers to provide a grace period for payment, to waive all late fees, and to halt all cancellations and expirations of policies from March 25, 2020 through May 9, 2020. It also extended the deadline that insureds had to repair property and be paid withheld depreciation until August 26, 2020.

If your insurer cancelled or declined to renew your policy during the dates above, and you found yourself uninsured for a claim due to the cancellation, you may have a claim against your insurer.  It is important to find out the specific positions taken by both your insurer, and your state, to determine this.

Kantor & Kantor is always available to support insureds whose insurance companies may have taken advantage of them.  Please call 800-446-7590 or use our online contact form to schedule a free consultation with an attorney.

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