Insurers say California's inaction threatens auto policies

SACRAMENTO, Calif. (AP) — Top U.S. insurance companies and associations say California is risking a crisis in the nation’s largest automobile insurance market by refusing to approve any rate increases for more than two years, since the start of the coronavirus pandemic.

The companies already are cutting back and say they can't continue operating at a loss while Insurance Commissioner Ricardo Lara delays rate cases filed by companies representing three-quarters of the California market. Allstate, Geico, Kemper, Liberty Mutual and State Farm all reported paying more in claims than they collected in California premiums in the first half of the year, though they were profitable as recently as last year.

It's part of Lara's effort to compensate consumers who he says were overcharged during the pandemic's early months, when traffic all but disappeared after California imposed the nation’s first stay-home order. His office couldn't say how much it thinks insurers still owe, but the advocacy group Consumer Watchdog puts the amount at more than $3 billion.

“Data we collected directly from the insurance companies themselves shows many of them failed to fully return premiums that they overcharged consumers,” said Deputy Insurance Commissioner Michael Soller. Part of the department's effort is “to make it right for consumers who continue to have been overcharged on premiums during the pandemic.”