According to the lawsuit, the number of miles traveled by motorists dropped sharply when the pandemic began in March 2020. In the same year, CSAA paid only about 48.2 cents in claims for every dollar in premiums that it collected from its automobile policyholders. The complaint claims the insurer overbilled customers by at least $250 million between March 2020 and June 2021, and CSAA only reimbursed about $96 million of that total.
Due to overcharging, CSAA’s profits on its auto insurance business jumped 665% in 2020, according to the complaint.
Consumer Watchdog has taken statements from legal professionals involved in the lawsuit.
“The California Insurance Commissioner named CSAA one of the three companies that most flagrantly violated its excessive premium refund orders. Our investigation shows that its identification of CSAA was fully justified,” Jay said. Angoff, partner at Mehri and Skalet. , one of three law firms representing CSAA policyholders in the lawsuit.
Read more: Allstate, Mercury, CSAA ordered to refund excess auto premiums
“So many Californians have suffered tremendously from COVID and its economic fallout, and major insurance companies like CSAA should not be allowed to profit during this historic pandemic,” added David Borgen, attorney at Goldstein, Borgen, Dardarian & Whoa.
“California law requires insurance companies to maintain fair rates at all times,” Harvey Rosenfield, attorney at Consumer Watchdog and author of Proposition 103, commented to his clients.