As we continue to come to terms with the greater ramifications of this crisis on all parts of our society, there are increasing calls to government organizations and industries to provide relief and concessions to the public. Early on the morning of Wednesday, March 25th, the US Senate and Executive Administration finally came to terms on a relief package for the COVID-19 national emergency. As the House and Senate are anticipated to quickly move forward on passing the bill into law, developments in aid, relief funding, and commerce regulation continue to evolve and unfold.
The insurance sector is certainly going to experience change through this crisis. While medical insurance has been dominating our attention through the global health crisis, other insurance formats are also facing new requirements and demands to evolve. As our nation grapples with shelter-in-place mandates, many experts are calling for revised billing practices from auto insurers. If over half the nation is being asked to stay at home, it only follows that fewer cars will be on the road, fewer accidents will occur, and car insurance costs to consumers should be revised accordingly.
During this period of uncertainty, Thompson Law will continue to sift through the wide–ranging and frequently changing landscape of the coronavirus crisis to give you the critical details and industry updates related to personal injury. We remain committed to providing you with the services and answers you are counting on from your personal injury attorney.
Leading consumer advocate groups are arguing they should. On March 18th The Consumer Federation of America and the Center for Economic Justice co-authored a letter to all State Commissioners of Insurance urging that they instruct insurers to provide offset payments and return of funds for policies that include premium calculations involving miles traveled and traffic rates.
Unsurprisingly, there have been varied statements from different commissioners’ offices, with different degrees of conformity to the request, and not all statements were made in direct response to the consumer advocate outreach.
In California for example, Insurance Commissioner Ricardo Lara has issued a statement very much in alignment with the consumer advocacy group recommendation letter. He called on all companies providing insurance coverage in California, including life, health, auto, property, casualty, and other types, to allow a 60-day grace period for premiums and policy changes. This request was made in an effort to help citizens during a troubled financial period and to relieve state institutions from upcoming renewal and course-of-business deadlines that hinder their ability to best serve the public through the crisis. For example, drivers’ license renewal applications and processing will almost certainly be delayed during the coming weeks and months. The grace period would mean that insurance customers facing a delay in their drivers’ license renewal processing would not automatically forfeit their auto insurance coverage due to an “unlicensed” status that is no fault of their own.
Texas, on the other hand, has not been as consumer well-being oriented to this point. State Insurance Commissioner, Kent Sullivan, has not issued any statement in specific response to the consumer advocacy request letter or made recommendations similar to those above from California. If anything, the responses have been aimed at easing challenges to insurance providers. The most recent statement from the Texas Department of Insurance (TDI), in fact, is providing a grace period for insurance agent continuing education requirements. TDI has given a more specific reprieve to insurance companies, in the form of 15–day extensions for handling claims, than they have to customers. The customer protection recommendations are outlined as gentle guidelines to insurers to “work with customers,” and includes no detail or guarantee to TDI protection or assistance for consumers. The full statement is available here.
Thompson Law is licensed to practice in numerous states, including Texas and California, so we are keenly aware of the confusion caused by varying practices and mandates in local cities, counties, and states. As we proceed through this period, it will remain a top priority for our firm to help our clients navigate the changing insurance policy landscape and ensure that we fight for every right and benefit to which you are owed after suffering an accident.
Insurance companies’ responses to the global health emergency have in many ways been lackluster. For links to current statements from major national insurers, visit our previous blog. Many insurance carriers are keeping statements vague or declining to make any statement at all, preferring to defer to their regulatory agencies for direction.
However, the confusion is not limited to insurance companies. The oversight organizations that they answer to have also largely remained vague in statements about the pandemic so far. Much of their recent public discourse can be summarized as “it’s too soon to tell.” While that may be true for impacts of this national emergency, the time to act and to protect citizens from devastating financial impacts is now.
National Association of Insurance Commissioners (NAIC) – has noted their priority of consumer health and safety, while calling for input from industry, legal, and regulatory professionals, and further statements and recommendations may be expected to come from the March 20th Special Session event.
Insurance Information Institute (III) – has not provided a definitive statement on premium offsets, instead of reminding consumers that policy prices are set by longer-term trends, but also noting that consumers who have telematic products installed in their vehicles may see more immediate benefits to their decreased drive miles.
American Property Casualty Insurance Association (APCIA) – has indicated that rates will be adjusted in accordance with a decline in accidents, but has not specifically tied this preemptive adjustment due to national emergency
It seems that as accident rates are likely to drop due to decreased driving miles in the coming weeks and months, we can also anticipate fewer claims that insurers will payout. It follows that insurers should be able to reduce premiums accordingly and at the same time better serve and assist their clients during the pandemic. But as of now, it seems only time will tell how industry leaders and regulators will actually proceed.
Should you cancel or lower your coverage during this time?
While it may be tempting to eliminate an expense that feels unnecessary right now, lapses in coverage can mean more expensive policy costs when the time comes to begin driving again. Policy premiums are typically dictated by as many as a dozen factors, and a lapse in coverage history can be one indicator that carriers consider risky in your driver history. Perhaps more critically, canceling your policy would leave you totally unprotected in the likely event that you do still find yourself on the road – whether running to the grocery store or heading in for medical care should you or one of your household members become injured or ill.
As highlighted in the letter from The Consumer Federation of America and the Center for Economic Justice, the largest contributor to moving accidents is the number of cars on the road, and reducing that number has the greatest impact on decreasing collisions. Due to our extremely limited movement right now, many cars are driving less or even zero miles. Non-essential fleet services, school buses, certain public transit vehicles and others are also contributing to our empty streets. All of these factors decrease your risk of an accident, so the insurance premium you pay in acknowledgment of collision risks should decrease accordingly.
What can you do as a policyholder?
One of the things insurance carriers are encouraging right now is making use of their phone app or online access. With these tools, you are able to review the details of your plan, evaluate your options, and make the coverage choices that are best for your family and your circumstances. If you are one of the many people stationed at home and finding you have some extra time right now, assessing and editing your policy to suit your circumstances, while remaining in compliance with state minimum coverages, might be a real benefit to your pocketbook and your safety.
If we can weather this difficult stretch, there may be some silver linings in the long–term financial impacts of the COVID-19 crisis. After the 2008 financial crisis, auto insurance industry rates declined through 2009 and did not recover to pre-crisis levels until 2011. While there are many considerations to make in the rebuilding of our economy after this crisis, past experience indicates it is safe to hope for some pricing stability in our auto insurance premiums.
Critical Takeaways and Your Best Resource
Many companies are taking steps to make their services more accessible, affordable, or even free in light of the changes the coronavirus pandemic has caused. It makes sense that major industries, including auto insurance, should follow suit to help provide the consumer relief by adapting their policies and operations in step with changing times.
Many decisions that are difficult and weighty in the best of times are even more cloudy now. In times such as these, it is even more valuable to have a trusted expert you can turn to for the advice you need. At Thompson Law, we recognize this responsibility and hope that we can be of service to you. If you are in the midst of or beginning a new personal injury claim, your dedicated team of legal experts can advise you on the best way to proceed and help you feel secure in your understanding of your coverages.
In addition to legal expertise, we are also committed to providing exceptional service to our customers, even in the current circumstances. Part of that responsibility includes communicating effectively around the industry and legal updates related to the COVID-19 pandemic. Our firm has always dedicated to providing great technological resources for our customers’ convenience. During this time, this practice serves an additional purpose of allowing us to continue working hard for our clients without compromising safety. This is a difficult and uncertain time for many of us, and we hope that our continued service and communications bring some peace of mind to at least one aspect of your life. Your personal injury claims, cases, and questions remain in good care with Thompson Law. If there is anything we can do to help or any additional clarity we can provide, please don’t hesitate to reach out.
Take care and stay safe.
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The statute of limitations for personal injury cases in Texas is two years, so if you have been injured in a motor vehicle accident, consult with an experienced personal injury attorney. The sooner you know your options, the sooner you are on the path to recovery and your deserved compensation. Call the 4’s right away for assistance with your injury and claim: 214-444-4444, 817-444-4444, 972-444-4444, 469-444-4444, or toll-free at the phone number below.