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Virtual Townhall Meeting Updates Insurance Claims and Small Business Loans Amid COVID-19

Several agencies and the Governor’s office offer a glimmer of hope as the fight to take back our lives continues

For a while now, news has been about the coronavirus, the discovery of new symptoms, the slow progress in finding a definitive cure and the harrowing fate of COVID-19’s victims, now including children.

But several agencies and the Governor’s office offer a glimmer of hope as the fight to take back our lives continues.
Changes to insurance claims and small business loans as a consequence of the pandemic were discussed in a virtual townhall meeting last May 15 involving six agencies.

Hosted by Chair of the Senate Human Service Committee Sen. Melissa Hurtado (D-Sanger), the virtual brief features a panel of experts including California Insurance Commissioner Ricardo Lara, California State Treasurer Fiona Ma, US Small Business Administration District Director Dawn Golik, Valley Community Small Business Development Center Director Rich Mostert and Valley Small Business Development Corporation CEO Debbie Raven.

Commissioner Lara enumerated his action items in response to the pandemic. On April 13, he asked for a 20 percent discount on auto insurance premiums to be returned to drivers and businesses. The stay-at-home order reduced the risk factors for many auto drivers. On April 14, he required insurance companies to comply with their contractual obligation to investigate coverage claims for COVID-19 just as they would for any disaster. At the time of the brief, Lara also ordered the premium discounts reflected in May, as well. On the May 18 hearing, he reviewed it again so that the risk factor is accurate.

His order included private passenger auto, commercial auto, workers’ compensation, commercial multi-peril, commercial liability and medical malpractice.

Lara’s stern order to insurance companies to exhaustively investigate claims include those for business interruption insurance related to COVID-19. And that claims should be acknowledged within 15 days and judgment should be rendered not more than 40 days after.

He also mentioned Gov. Newsom’s executive order (EO) on May 6 on rebuttable presumption. The EO covers front line workers who tested positive for COVID-19 within 14 days of labor or service after the stay-at-home order on March 19. The presumption is in effect 60 days after the EO.
To further assist consumers in the emergency, the State’s Department of Insurance enforced:

  • A 60-day grace period to pay insurance premiums
  • A 90-day extension for insurance claim deadlines
  • A maintenance for those with expired license or car registration
  • An extension of personal auto coverage for delivery drivers in essential businesses
  • A no-cost co-pay for COVID-19 testing and screening
  • A notice to insurance companies that workers’ comp insurance applies to everyone regardless of immigration status

State Treasurer Ma mentioned her website at http://www.treasurer.ca.gov now prominently features click buttons COVCID-19 Updates and COVID-19 Resources.

She said the Updates button is a more reliable source than social media while the Resources button opens up to Small Business and Food Access resources, and Tax, Individual and Non-profit relief.

Ma also said the Economic Injury Disaster Loan (EIDL), an emergency advance of up to $10,000 for small businesses, does not have to be re-paid. But is sadly unavailable for the moment. Only a limited advance application from agricultural businesses are currently being considered.

The Paycheck Protection Program (PPP) resumed accepting applications on April 27. The SBA loan helps businesses keep their employees get paid for work through the pandemic. The PPP is an incentive that allows business owners’ loan to be forgiven by the SBA if they keep all their employees on payroll for eight weeks. And if the money is used for payroll and business rent, mortgage interest and utilities.

Golik represents the only Cabinet-level agency that deals with small businesses. She said that this is the first time her agency was involved in an emergency. She had more details on EIDL and PPP.

She explained that the EIDL is available as a forgivable $10,000 loan or a long-term loan. Payment becomes due on the loan after 12 months from set up. There is no fee to apply.

The PPP can be deferred for six months with a low one percent interest rate, two-year term and no pre-payment. The terms for loan forgiveness is usually determined by the loan provider and guidance is still forthcoming. A second round of PPP can still accept applications. While the first round saw difficulty in sourcing lenders, many Silicon Valley credit unions and even Amex, Paypal and other lenders stepped up for small businesses.

PPP also provides flexibility for small businesses to be able to pay their employees even if they are closed.\

Both EIDL and PPP can be both used together by small businesses.

Mostert’s agency is funded by the SBA to serve non-profit organizations. Their services come at no cost and they are strictly confidential. They are the go-to for qualification and funds facilitation, offering one-on-one consultation. They advise on traditional and non-traditional lending alternatives like municipal CD programs, crowd-funding and grants that straddle different counties or towns. They offer assistance from when the small business gets the loan until it becomes sustainable and beyond.

Raven described a small business disaster relief fund benefit program that was designed for the pandemic: quick turn and less paperwork. – Harvey I. Barkin