California fines insurer and insurtech over claims mishandling
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The California Department of Insurance has fined app-based car insurance service provider Go Maps and its insurance underwriter Topa Insurance Company after an investigation into complaints that claims were mishandled for more than two dozen drivers.
Under the settlement agreement, Go Maps agreed to surrender its insurance licence, pay a $150,000 fine, pay $50,000 in cost reimbursement, and provide the Department with all the information necessary to ensure statutory requirements are fulfilled regarding existing policyholders.
Topa was fined $2.1m, and agreed to ensure it has permanent access to all policies managed by any future general agents, certify all general agents and entities hired by general agents are properly licensed, and not to seek any money from consumers who may have been undercharged as a result of rating mistakes in the Go Maps/Topa program.
Insurance Commissioner Ricardo Lara said the settlements represent “an important victory” for California consumers.
He added: “While we encourage new products and innovation in our marketplace, our top priority is protecting policyholders and making sure insurance companies deliver on their promises.”
Go Maps and Topa have been contacted for comment.
What happened?
Investigations were announced in June 2022, when the CDI argued the companies failed to follow consumer protection laws. As a result, drivers were forced to pay for rental car expenses and other costs while their insurance claims were delayed, said the regulator.
Go Maps is an 'insurtech' company that used an app-based marketing platform to sell and transact its insurance business for Topa.
In 2019, Go Maps agreed with Topa to perform the sale, service, management and claims handling of Topa’s private passenger automobile policies that were sold to the public through the Go Maps app.
At one point, the Go Maps/Topa programme had more than 10,000 California customers, representing the vast majority of its roughly 12,000 policies nationwide.
According to the state regulator, Go Maps and Topa:
· failed to pay claims within 30 days after the coverage was determined or a settlement was reached. For one consumer, the companies missed the deadline by 52 days. The average delay was more than 24 days beyond the legal 30-day limit.
· failed to acknowledge claims, provide necessary forms or instructions, or begin investigations within the statutory 15-day requirement. For one consumer, the companies missed the deadline by 30 days. The average delay was more than eight days beyond the legal 15-day requirement.
· failed to respond to consumers’ inquiries about their claims within 15 days. For one consumer, the companies missed the deadline by 25 days. The average delay was more than 11 days beyond the legal 15-day requirement.
· failed to deny or accept claims within 40 days. For one consumer, the companies missed the deadline by 66 days. The average delay was more than 25 days beyond the legal 40-days deadline.
· hired an unlicensed insurance adjusting firm to adjust claims.
Settlement details for Go Maps and Topa can be below.
Should regulations for insurtech startups be strengthened?
