California Carrier To Refund Homeowners For Overpriced Wildfire Insurance

California Commissioner Ricardo Lara has announced that Kemper Independent Insurance Company overcharged its policyholders for their wildfire insurance coverage. As a result, that insurer has issued $1.5 million in refunds to thousands of homeowners.

Both Kemper and Unitrin Auto and Home Insurance Company, its affiliate insurer, have also agreed to pay $617,200 to the General Fund as a combined penalty and a further component of the settlement it reached for overcharging for wildfire insurance.

The issue was that the companies had been using wildfire risk scores to calculate a policyholder’s premiums.

In 2015, those insurers introduced new surcharges for that peril, based on a policyholder’s property’s Fireline risk score. Properties that scored higher on Fireline were charged a higher price for their coverage.