The state has threatened to penalize insurers for tactics to stall in providing coverage to drivers.
California drivers have been registering complaints regarding the challenge they face in trying to obtain the auto insurance legally required to drive in the state.
In response, the state commissioner is warning of a potential crackdown against stalling insurers.
Commissioner Ricardo Lara announced this week that his department has been receiving “numerous” complaints from auto insurance customers that are dealing with lengthy questionnaires, waiting periods and other stalling practices that are potentially violating Californian laws. Lara published a bulletin warning insurers that insurers could face enforcement actions as a result of these behaviors. The bulletin also requested that insurers contact the legal division of the Insurance Department if they have any questions.
“These alleged passive-aggressive tactics by insurance companies to slow down drivers’ access to coverage are unacceptable, dangerous, and will not be tolerated,” said Lara in a news release.
The specific number of auto insurance complaints hasn’t been released, but it is being called “numerous.”
In Lara’s bulletin, the commissioner outlined the types of insurer actions he has identified as improper as a part of the application process for a policy. Among them includes requiring potential customers to complete lengthy questionnaires, verify employment or education information, complete questionnaires that have been send in the mail even when applicants have elected to receive electronic documents, providing information about other drivers at the same address that will be excluded from the policy, and providing copies of vehicle registrations, utility bills, and photos of vehicles or driver’s licenses.
The bulletin provided auto insurance companies with a reminder that any time they wish to make changes to their application process, they are required to publicly file them. They were also reminded that an application process includes 15 days following receipt to bind coverage, and that the insurer must offer and sell coverage to any good driver who applies. Moreover, insurers must also provide good drivers with discounts.
“These waiting periods, questionnaires, and other practices may serve as barriers to the acceptance of otherwise qualified drivers and are being used as roadblocks to slow down, restrict, non-renew, or outright refuse auto insurance coverage,” said Lara in the bulletin.