ConsumerWatch

Calif. Insurance Rates Cut But No Refunds Issued

SAN FRANCISCO (CBS 5) ― "I have four cars insured by Allstate including my 1969 VW van," said Silvia Felix. Silvia pays $1,800 every six months to insure those cars, and another $1,000 a year to insure her home.

So she was excited when she learned the California Insurance Commissioner ordered several major cuts in auto and home insurance rates.

She called her Allstate agent, thinking she'd get a refund for being overcharged. "So I called to find out about my refund. And they said, 'Sorry, there is no check in the mail'," recalled Silvia.

Her agent was right: If you've already paid your premium, you won't get a refund. "This is just for new business or new renewals moving forward into the future," said California Insurance Commissioner Steve Poizner.

Siliva just got the 6 month renewal for her auto insurance and it's almost $400 less. But she won't see a reduction in her homeowner's insurance until she renews next year.

According to the Department of Insurance, Allstate policy holders will save a whopping $255,000,000. And it's not just Allstate. Mercury's rates were cut by $61,000,000, GEICO's by nearly $68,000,000, and AAA of Northern California's by $100,000,000. Since 2007, Californians have saved $1.7 billion on their premiums.

"This really couldn't happen at a better time. Consumers are struggling now, gasoline prices are through the roof, the economy is sputtering, families are struggling to make ends meet," said Poizner.

Silvia's happy she'll be saving money, but she wishes she'd gotten a refund for years of higher premiums.

"What they are doing isn't fair, but you know insurance companies aren't in business to be fair. They are in the business to make money," said Siliva.

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