Covid-19 form & endorsement filings now blooming in states, including rate cuts for slowing retail, restaurant businesses

Commercial property/casualty insurers, much like their auto insurer brethren, are now offering premium rebates and other relief even as some seek to enforce or establish virus exclusions for business interruption, while medical malpractice insurers are cutting premiums for private practice doctors, according to a spate of new Covid-19 state filings. 

At the same time, life insurers are submitting questionnaires to policyholders or applicants on their experience with the virus, filings to state insurance regulators and the Interstate Compact reveal. 

Farmers Insurance, on behalf of several companies, recently submitted a rate and rule filing to give a 20% temporary relief measure for insureds in its restaurant business owners policy and retail/service/office programs due to the novel Coronavirus’s impact.

At the same time, regulars like California Insurance Commissioner Ricardo Lara have begun mandating premium relief for both personal and commercial lines customers.

“With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss,” Lara stated in a release April 13.  “Today’s mandatory action will put money back in people’s pockets when they need it most.”

The Farmers’ measure, filed April 10 by its commercial product director for Farmers Business Insurance, seeks to reduce premiums by 20% for two months for customers in the restaurant and retail/service/office segments. In addition, Farmers and related companies will apply a minimum credit of $20 per month.

There will be no cap on the amount of the premium decrease for larger premium policies, the company said in its filing. These Farmers’ business customers do not need to take any action to make this credit effective although customers on non-monthly pay plans with no remaining balance on their account will receive a refund via check.

“Farmers believes that because of the various stay-at-home orders around the country, the risk for accidents and property damage at these insured locations has been reduced,” it stated in filings with insurance regulators. “The 20% was selected using actuarial judgment while observing the effects of shelter-in-place on local businesses.”

On the medical practice front, Positive Physicians Insurance Co. of Berwyn, Penn., filed a part-time status endorsement for approval to state regulators to address the “many grievance requests from our insureds who are being negatively affected by the COVID-19 crisis,” it is receiving.

Doctors have asked their insurer to reclassify their practice as part-time, with accompanying premium decreases, or who are shuttering their medical offices temporarily or permanently, Positive Physicians said. 

Others are quick to file the exclusion of loss due to virus or bacteria endorsement in the wake of Covid-19. 

For example, Blackboard Insurance Co. in New Jersey filed for the use of this form for its commercial property policy with state regulators.

This business interruption exclusion is a lynchpin of current and potentially massive coverage disputes in the commercial p/c industry. 

To drive home the point, a group of seven senators sent a letter to President Trump, copying the Treasury Secretary Steven Mnuchin April 10. In it, they warned that if certain proposals that would retroactively changing BI insurance to cover damages due to the virus succeed or are litigated at length, p/c insurers could be hobbled financially to the point where they might not have enough reserves to cover standard claims for damage from wind, fire, hail, and other perils. 

“If the insurance industry were now forced retroactively to cover perils that were never accounted for, commercial insurers could experience significant economic strain and/or insolvencies, given the magnitude of the current cumulative estimated claims,” the seven senators, led by Tim Scott, R-S.C., stated. 

The Palisades Property and Casualty Insurance Co. filed in New Jersey for all business written by the Plymouth Rock companies to extend, Additional Living Expense Coverage to any health care worker required by illness or job requirements caused by COVID-19 to temporarily live somewhere other than their primary home. 

This would apply when these expenses aren’t paid by the insured’s employer or a third party. The extension of coverage begins April 1, 2020, and will remain in effect as long as the current statewide stay-at-home order is in place, according to the Palisades filing. 

The Southern Farm Bureau Life Insurance Co. of Jackson, Miss., filed an application for proposed clients that includes a detailed questionnaire of their Coronavirus/COVID-19 history. It includes a question on whether the applicant has been given medical advice by a member of its profession for any new or unexplained continuous cough, a high temperature or fever, and/or breathing difficulties. 

Likewise, Banner Life Insurance Co. has filed to use an individual life temporary insurance application with Covid-17 questions to answer, including whether the applicant has been given medical advice on the virus.

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