Home Insurance Companies in California Take Notice

A situation might prove to be of interest to home insurance companies in California. According to reports, homeowner and auto insurance firm Mercury Insurance became the subject of a Market Conduct Examination by the state Department of Insurance.
 
The department has alleged that Mercury might have overcharged thousands of clients in the state for homeowners and auto insurance. This, according to reports, is a potential violation of California’s insurance statues.
 
The Market Conduct Exam covered the period March 1, 2007-May 31, 2007. According to the state insurance department, during the period examined, the company may have violated certain insurance codes which resulted in clients being denied insurance coverage or getting overcharged.
 
The examination result alleged that the insurance firm has failed to take corrective actions with regards to violations of California laws identified by the Department of Insurance from examinations held in 1998 and 2002.
 
Furthermore, the company also supposedly failed to collect information on prior accidents involving a certain driver during the driver’s automobile insurance application and process of underwriting. The required information was supposedly meant to ensure that surcharges will be applied only to accidents wherein the person insured is the one at fault.
 
Another alleged violation that might be of interest to home insurance companies in the state is that insurance premium credits of home owners were reportedly not applied in a consistent manner or whenever such credits were due.
 
Mercury Insurance Group is comprised of three units; Mercury Casualty, California Automobile Insurance Co. and Mercury Insurance Co. The company is given 10 days to address and correct each violation as enumerated in the exam.
 
The violations need to be corrected, according to reports, or the company will face a fine of $5,000 for each identified violation and additional $5,000 should the violations be proven to have been committed in a willful manner.
 
Meanwhile, Mercury has denied committing the alleged violations and the investigation is still ongoing. Conclusions and definite charges have yet to be made against the insurance company.
 
The situation involving Mercury Insurance Group might prove to be of interest to home insurance companies in California, particularly in terms of state statues governing home owners’ insurance charges.