Consumer Advocates Applaud California for Moving to Protect Consumers from Pandemic Price Gouging

The Consumer Federation of America (CFA) and Center for Economic Justice (CEJ) praised California Insurance Commissioner Ricardo Lara’s action to require insurers to give back COVID windfall profits by sending additional auto insurance premium refunds to California customers. The California Department of Insurance is also requiring ongoing refunds for consumers as long as the pandemic keeps driving and accident rates low.

“Since March 2020, consumers have been driving much less than they were before the COVID-19 pandemic, and that is still true today. As a result, crashes and claims are well below normal, which means massive insurer profits,” said J. Robert Hunter, CFA’s Director of Insurance and a former Texas Insurance Commissioner. “Commissioner Lara’s announcement is most welcome and will result in additional money being returned to California drivers. Other Insurance Commissioners should be ashamed that they have done so little; they should follow suit and stand up for the residents of their states,” he continued.

CFA and CEJ put regulators on notice in March 2020 of impending windfall profits for auto insurers due to dramatically reduced driving, fewer cars on the road, fewer accidents, and fewer auto insurance claims. The groups repeatedly pressed commissioners to require insurers to give up COVID windfall profits and return premium to consumers. The groups calculate that since the pandemic began, auto insurers…