California Calling for 60-Day Premium Grace Period Amid COVID-19 Outbreak

California Insurance Commissioner Ricardo Lara is asking insurers for a grace period on paying premiums.

Lara today issued a notice requesting that all insurance companies provide their policyholders with at least a 60-day grace period to pay insurance premiums to ensure policies are not cancelled for nonpayment of premium due to the novel coronavirus (COVID-19) public health emergency.

The notice follows Gov. Gavin Newsom’s state of emergency declaration to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the state prepare and mitigate against the broader spread of COVID-19.

Lara’s notice is directed to all admitted and non-admitted insurance companies that provide any insurance coverage in California including, life, health, auto, property/casualty and other types of insurance.

“Now is the time to come together to help consumers weather this unprecedented period of uncertainty, and that includes helping policyholders maintain their insurance coverage if they are unable to pay their premiums,” Lara said in a statement. “We must do everything we can to ensure that consumers and their families maintain insurance coverage protection during this public health pandemic.”

Lara is also requesting that all insurance agents, brokers, and other licensees who accept premium payments on behalf of insurers take steps to ensure that customers have the ability to make prompt insurance payments if possible. This includes alternate methods of payment, such as online payments, to eliminate the need for in-person payment methods in order to protect the health and safety of both workers and customers.

In a separate Notice, Lara requested the assistance of all automobile insurers, producers, and other licensees transacting automobile insurance in California. The California Department of Motor Vehicles recently asked California law enforcement to exercise discretion for 60 days in their enforcement of driver license and vehicle registration expirations beginning March 16 in order to have at-risk populations, including seniors and those with underlying conditions, avoid required visits to DMV field offices.

Lara called on auto insurers to refrain from using the expiration of policyholders’ drivers licenses or vehicle registrations for 60 days from March 16 for any of the following reasons:

• To affect a driver’s ability to secure and maintain auto insurance coverage;
• To affect a driver’s eligibility for a Good Driver discount;
• To determine eligibility for a California Low Cost Automobile policy;
• To impact the rates charged to any driver.

This second notice regarding driver license and vehicle registration expirations will be reevaluated at the end of the 60-day period.