California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 4.7 - Private Passenger Automobile Rating Factors
Article 4 - Good Driver Discount Policy
Section 2632.14.3 - Letter of Refusal for Good Driver

Universal Citation: 10 CA Code of Regs 2632.14.3

Current through Register 2024 Notice Reg. No. 12, March 22, 2024

(a) As used in Insurance Code section 658, "refuses to accept an applicant" means a failure or refusal, either by an insurer or any of its appointed agents, to allow an applicant for a Good Driver discount policy, as defined in Insurance Code section 1861.025, to complete an application for insurance, or to respond to a telephone inquiry about obtaining insurance coverage within three business days of receipt of the inquiry. It also means any attempt or act on the part of an insurer or any of its appointed agents to dissuade an applicant for a Good Driver discount policy from completing an application for insurance, other than statements which inform the applicant about how the applicant can obtain insurance on more advantageous terms from another insurer.

(b) As used in Insurance Code section 658, "refuses to issue a good driver discount policy" includes an insurer's failure or refusal to bind coverage within fifteen business days of the date of receipt, by the insurer or any of its appointed agents, of the insurer's application completed by or on behalf of the applicant. The fifteen-business-day time period shall begin from the date either the insurer or any of its appointed agents receives the completed application, whichever date is earliest. The fifteenth day of the fifteen-business-day time period shall be deemed the date on which the insurer "refuses to issue a good driver discount policy."

(c) When an insurer's appointed agent refuses to accept an applicant for a Good Driver discount policy or refuses to issue a Good Driver discount policy when written application has been made by a Good Driver, that agent shall provide the written statement required by Insurance Code section 658 explaining the reason for the refusal.

(d) As used in Insurance Code section 658, the requirements that an insurer "shall furnish the applicant for insurance a written statement within 10 days of the refusal" means that the insurer or agent shall provide the written statement to the applicant by personal delivery within ten calendar days of the refusal date, or if the written statement is provided by mail, shall mail the written statement to the applicant by first class U.S. mail postage prepaid within ten calendar days of the refusal date.

(e) As used in Insurance Code section 658, the requirement that the written statement explain the "reason or reasons relied upon for denying insurance coverage" means that the written statement shall set forth in detail all of the facts on which the refusal is based. Mere conclusory statements unsupported by a statement of facts pertaining to the particular applicant shall be insufficient to satisfy the requirements of the statute.

(f) Every applicant who meets the criteria for purchase of a Good Driver discount policy shall be provided, at the time the applicant first inquires about obtaining an automobile liability policy from the insurer or any of its appointed agents, with the following statement:

An insurer which refuses to provide coverage to an applicant who is a "Good Driver" must provide the applicant with a written statement of the reasons it denied coverage. In general, under California law a Good Driver is a person who has not had more than one violation point or more than one at-fault accident resulting in only property damage in the last three years.

Every such applicant inquiring about coverage in person or by mail shall be provided with a written copy of the statement, which shall appear in at least ten-point type. Every such applicant inquiring about coverage by telephone shall be provided with the statement by telephone.

(g) This section shall apply to applications for private passenger automobile insurance only.

(h) This section shall apply only to persons qualified to purchase a Good Driver Discount policy as defined in Insurance Code section 1861.025.

1. New section filed 4-5-94; operative 5-5-94 (Register 94, No. 14).
2. Change without regulatory effect amending subsections (a) and (f) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.

Note: Authority cited: Sections 12921 and 12926, Insurance Code; CSAA v. Garamendi (1992) 6 Cal.App.4th 1409. Reference: Sections 658, 1861.02 and 1861.025, Insurance Code.

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