Policy holders pay premiums in order to have many types of insurance including business, auto, and health insurance. The effect of the coronavirus on insurance premiums varies among the jurisdictions since insurance companies are regulated by the states. Overall, many states are providing leniency to those affected by COVID-19.
In
New Jersey
, a recent emergency directive requires insurers to grant extensions for premium payments owed by businesses and individuals experiencing financial difficulties due to the pandemic. The extension for health and dental insurance policies is a minimum 60-days. The extension for life, auto, homeowners and renters insurance is a minimum 90-day window. The extended grace period is not automatic and must be requested by policy holders. Prior to the mandate, New Jersey
encouraged all insurance companies
to relax payment deadlines, extend grace periods, waive late fees, and offer payment plans for insurance in order to avoid canceling or non-renewing policies.
In
Pennsylvania
, the Insurance Commissioner has issued a bulletin encouraging insurers to assist those affected by the pandemic. “Insurers should consider the following actions: consistent with prudent insurance practices, relaxing due dates for premium payments, extending grace periods, waiving late fees and penalties, and allowing payment plans for premium payments to otherwise avoid a lapse in coverage. Insurers should consider cancellation or non-renewal of policies only after exhausting other efforts to work with policyholders to continue coverage.”
This Bulletin applies to commercial and personal, property, casualty, accident and health and life policies. Extensions are not automatic. Policyholders must contact their insurance carriers and agents and explain their individual situation and difficulties complying with payment schedules.
