By Staff Editors, COLLISION WEEK
July 1, 2021
Consumer Group Alleges Auto Insurance Companies Overcharged California Motorists $5.5 Billion During First Year of Pandemic
According to an analysis by Consumer Watchdog, while the vast majority of Californians drove far less last year, most California insurance companies continued to charge pre-pandemic auto insurance rates, reaping a windfall of about $5.5 billion. Newly published 2020 data show that accident claims plummeted as cars idled in driveways, but insurance companies failed to reduce rates accordingly.
As a result, insurance companies’ average return on net worth – a measure of profitability that includes premiums and investment income – was more than twice what California law allows last year.
Consumer Watchdog’s analysis is based on profit and loss data.