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CA Department of Insurance

Illegal auto policy moratoriums in southland wildfire areas leads regulator to take action

News: 2017 Press Release

For Release: December 11, 2017
Media Calls Only: 916-492-3566
Email Inquiries: cdipress@insurance.ca.gov
Illegal auto policy moratoriums in southland wildfire areas leads regulator to take action
Commissioner also asks insurers to expedite claims handling to aid wildfire victims
SACRAMENTO, Calif. — In response to insurers imposing moratoriums on writing new private passenger auto policies or prohibiting additions to existing auto policies in the Southern California wildfire areas, Insurance Commissioner Dave Jones issued a formal notice to insurers directing them to cease any and all moratoriums on auto insurance and reminding them that California law prohibits this practice.

Proposition 103 and regulations issued by the commissioner require insurers to write private passenger auto coverage for any consumer who qualifies as a good driver.

"Buying new auto coverage or changing your auto insurance coverage any time before you experience a loss is your right as a good driver," said Insurance Commissioner Dave Jones. "I am committed to making sure consumers' rights are protected, which is why I issued a notice to all property and casualty insurers writing private passenger auto directing them to stop any and all moratoriums on auto insurance and reminding them that such moratoriums and restrictions are prohibited under California Law."

Consumers are urged to contact the California Department of Insurance if their insurer, agent or broker tells them they will not write a new policy or allow changes to an existing auto policy. The toll-free number is 800-927-4357.

In a second action taken to help Southland wildfire victims, Commissioner Jones issued a notice to insurers asking them to agree to expedite wildfire claims handling and adopt a billing grace period.

Most insurers agreed to the commissioner's request to follow expedited claims handling procedures after the October wildfires in Northern California. The commissioner expects insurers to agree to these procedures for the Southern California wildfires.

With thousands of homes damaged and destroyed by wildfires blazing across the state, residents face the long and painful task of recovery, which often includes trying to reconstruct destroyed or missing documents.

In an effort to speed recovery, Commissioner Jones asked insurers with policyholders in the areas hit by fires to agree to claims handling procedures to bring more timely payments and flexibility with some of the deadlines and documentation typically required by insurers.

"These fires are exacting a devastating emotional and financial toll on residents across the state," said Insurance Commissioner Dave Jones. "Victims need every resource available to them as quickly as possible, which is why I am asking California insurers to adopt these expedited claims handling procedures to get help to policyholders. I strongly encourage California insurers to adopt these procedures to help fire victims begin to put their lives back together."

After destructive wildfires, policyholders often find much of what the insurance company needs to process their claim are missing or were destroyed in the fire, such as home inventories, receipts, bills of sale, and vehicle ownership papers. Under the commissioner's expedited claims handling procedures, policyholders may receive advance payment for up to four months of additional living expenses, 25 percent of policy limits for personal property, and an expedited process for debris removal—a first step in rebuilding.

These procedures speed payment for damaged or destroyed vehicles and provide at least 30 days billing leniency for lost renewal notices or those who do not have the ability to have mail forwarded.

Policyholders should contact their insurance company and insurance agent to begin the claims process. They may also contact the Department of Insurance Consumer hotline at 800-927-4357 to seek assistance or visit the Department's website for tips and advice.

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The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $394 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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