NEW QUAKE OPTION; INSURER MAY GIVE OWNERS MORE CHOICES.Byline: Gregory J. Wilcox Wilcox may refer to: Place names in the United States
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A new player plans to enter the state's homeowners insurance market, offering a comprehensive earthquake policy that provides broader - and in some cases, cheaper - coverage than is now available through the California Earthquake Authority Established in September 1996 by the California Legislature, the California Earthquake Authority is a privately funded, publicly managed organization that sells California earthquake insurance policies through participating insurance companies. . Walnut walnut, common name for some members of the Juglandaceae, a family of chiefly deciduous, resinous trees characterized by large and aromatic compound leaves. Species of the walnut family are indigenous mostly to the north temperate zone, but also range from Central Creek-based Pacific Select Insurance Co.'s top-of-the-line product features a 10 percent deductible That which may be taken away or subtracted. In taxation, an item that may be subtracted from gross income or adjusted gross income in determining taxable income (e.g., interest expenses, charitable contributions, certain taxes). , partial coverage for auxiliary auxiliary In grammar, a verb that is subordinate to the main lexical verb in a clause. Auxiliaries can convey distinctions of tense, aspect, mood, person, and number. structures like garages, liberal reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. provisions for contents and temporary shelter in the event a home is rendered uninhabitable by a temblor. In some cases Pacific Select's comprehensive policy will be less expensive than what is available through the CEA CEA carcinoembryonic antigen. CEA abbr. carcinoembryonic antigen CEA (Carcinoembryonic antigen) ; in others, the premium will be higher but it will buy more coverage. This is the first new insurer An individual or company who, through a contractual agreement, undertakes to compensate specified losses, liability, or damages incurred by another individual. An insurer is frequently an insurance company and is also known as an underwriter. to enter the state's homeowners market with coverages similar to what was available before the 1994 Northridge Earthquake The Northridge earthquake occurred on January 17, 1994 at 4:31 AM Pacific Standard Time in the city of Los Angeles, California. The earthquake had a "strong" moment magnitude of 6. rocked the insurance industry, officials said. Charles Charles, archduke of Austria Charles, 1771–1847, archduke of Austria; brother of Holy Roman Emperor Francis II. Despite his epilepsy, he was the ablest Austrian commander in the French Revolutionary and Napoleonic wars; however, he was handicapped by Quackenbush, the state's elected insurance commissioner, welcomed the additional competition from Pacific Select and said he encouraged the company to start doing business here. He said he expects the firm to begin selling policies by year's end. ``The more companies we have selling product the more competitive prices are. I want as many companies selling product in this state as possible,'' Quackenbush said in an interview. ``It's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have another choice for consumers.'' Property owners filed $12.5 billion in claims after the Northridge Northridge is the name of some places in the United States of America:
Woodland Hills-based 20th Century Insurance Co. took an especially hard hit, paying out $1.04 billion to settle 46,400 claims. The state created the CEA so consumers would have at least partial coverage from earthquakes. Once it gets state approval, Pacific Select will make policies available through the Insurance Brokers and Agents of the West Service Corp. What it would cost Coverage should be available in most San Fernando Valley San Fernando Valley Valley, southern California, U.S. Northwest of central Los Angeles, the valley is bounded by the San Gabriel, Santa Susana, and Santa Monica mountains and the Simi Hills. area communities, with annual premiums ranging between $2.15 to $5.52 per $1,000 of coverage, the company said. On a $200,000 house, the yearly cost to consumers would range between $430 to $1,104 depending on its location, with up to $100,000 in reimbursement for destroyed contents and a $25,000 cap on temporary living expenses. In contrast, the CEA's coverage, known as a ``mini-policy,'' features a 15 percent deductible, caps content loss at $5,000 and provides $1,500 for temporary living expenses. The annual CEA premium on a $200,000 home in the San Fernando Valley is about $800 a year, nearly twice the cost of a pre-Northridge Quake policy despite having a larger deductible and tighter caps. Pacific Select will also offer what are known as ``wrap-around'' policies consumers can buy to supplement coverage offered by the CEA and also offer its own version of a mini-policy. In all, the company will offer five earthquake-related products. Pacific Select applied for a certificate enabling it to sell policies last week. The state has six months to evaluate the application but typically takes about 90 days. Quackenbush does not anticipate any problems with the application, saying the company is offering a viable option to consumers. ``We would not permit them to sell the product unless there was money backing them up,'' he said. Pacific Select, a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. , plans to make extensive use of reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. to minimize its potential losses. The reinsurers will hold a credit rating of A or better from A.M. Best, said Rich Campagna, Pacific Select's president. Best evaluates companies in the industry, and a rating of A or better means they have excellent financial strength and the ability to meet their ongoing obligations to policyholders. Most homes eligible In some sections of the state, including a few in the Valley area, the comprehensive coverage will not be available. But the vast majority of the state's homeowners will be able to get coverage. ``Generally, L.A. isn't nearly as big a problem as the Bay Area,'' Campagna said in assessing earthquake risk. So far, the company has received $25 million in start-up Start-up The earliest stage of a new business venture. funds from four investors. The biggest - Centre Re, a reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. that is a unit of the Worldwide Zurich Group - holds a 40 percent stake. Philip Roberto, research director for the Proposition 103 Enforcement Project, an insurance watchdog group, said the participation of Centre Re in the venture should give the new company some muscle in the marketplace. ``For any insurer to get major reinsurance support gives them further backing and enables them to compete stronger by offering better rates,'' Roberto said. ``It's good to see someone other than the CEA as a viable choice for consumers.'' Once in business, Pacific Select hopes to book about $20 million in premiums, Campagna said. ``We will watch the build up of risk in any one area. What we need to do is spread our business evenly across the state,'' he said. ``But initially there won't be any limitations (on policies).'' Selectivity selectivity /se·lec·tiv·i·ty/ (se-lek-tiv´i-te) in pharmacology, the degree to which a dose of a drug produces the desired effect in relation to adverse effects. selectivity 1. is not an option for the CEA, which at least partially explains the authority's pricing structure, high deductibles and low payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. caps. ``We have to write all comers all who come, or offer, to take part in a matter, especially in a contest or controversy. - Bp. Stillingfleet. See also: Comer . We don't have any underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. restrictions,'' said CEA spokesman Mark Leonard. ``Our rates have to reflect that we take a larger percentage of bad risks than a regular insurer would.'' Competition welcome Critics, though, say consumers still pay too much for too little coverage through the CEA. So it is good to see a new competitor in the marketplace, they say. ``It's great for consumers. Pacific Select is backed up by Zurich, which is a huge reinsurer,'' said Bill Ahern, senior policy analyst at Consumers Union in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . ``They should get hundreds of calls from people who are real unhappy with the (state's) earthquake authority. And the worldwide reinsurance market should be able to handle this kind of risk. That's what they are there for.'' The authority has about 70 percent of the quake coverage business. Ric Hill, a spokesman for 20th Century, said Pacific Select's emergence on the scene fulfills one goal of the CEA, which is getting more companies selling insurance. ``It's a positive development for the California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). marketplace. It will certainly help to augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: the capacity that the CEA is going to have to shoulder,'' Hill said. ``And it will also serve to improve the marketplace for consumers.'' RATES BY THE NUMBERS A new company, Pacific Select Insurance Co., plans to enter the earthquake insurance Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. market in California with a variety of products. Here is how its most comperhensive plans stack up against what's offered through the California Earthquake Authority. Prices are for the annual premium on a $200,000 home. Pacific Select's `Premier EQ Protector' features a 10 percent deductible, caps content loss at $100,000 and provides up to $25,000 for temporary living expenses. There is a 12 percent surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. for homes built between 1937 and 1972. The CEA's mini-policy has two basic rtes, one for homes built between 1960 to 1978, and the other for homes built after 1979. There is a 15 percent deductible, content loss is capped at $5,000 and there is a $1,500 allowance for temporary living expenses. ZIP COMMUNITY PACIFIC CEA CEA CODE SELECT `60-'78 '79 later 93510 Acton $618 $340 $280 91301 Agoura $430 $380 $300 91501 Burbank $544 $600 $500 91502 Burbank $884 $600 $500 91504 Burbank $884 $600 $500 91505 Burbank $884 $600 $500 91506 Burbank $884 $600 $500 91302 Calabasas $430 $380 $300 91303 Canoga Park $776 $880 $720 91304 Canoga Park $776 $800 $720 91306 Canoga Park $776 $800 $720 91307 Canoga Park $700 $880 $720 91351 Canyon Country $700 $340 $280 91310 Castaic $544 $600 $500 91384 Castaic $776 $880 $720 91311 Chatsworth $700 $880 $720 90041 Eagle Rock $484 $600 $500 91316 Encino $776 $880 $720 91436 Encino $776 $880 $720 91201 Glendale $544 $600 $500 91202 Glendale $618 $600 $500 91203 Glendale $544 $600 $500 91204 Glendale $544 $600 $500 91205 Glendale $484 $600 $500 91206 Glendale $776 $600 $500 91207 Glendale $700 $600 $500 91208 Glendale $700 $600 $500 91344 Granada Hills $700 $880 $720 91011 La Canada $1,104 $340 $280 91214 La Crescenta $1,104 $340 $280 93532 Lake Hughes N/A $340 $280 93534 Lancaster $776 $340 $280 93535 Lancaster $544 $340 $280 93536 Lancaster $1,104 $340 $280 93551 Leona Valley N/A $340 $280 93543 Little Rock $1,104 $340 $280 91345 Mission Hills $1,104 $880 $720 91020 Montrose $1,104 $340 $280 93021 Moorpark $544 $380 $300 91320 Newbury Park $430 $380 $300 91321 Newhall $1,104 $880 $720 91601 North Hollywood $884 $800 $720 91602 North Hollywood $884 $800 $720 91605 North Hollywood $884 $600 $500 91606 North Hollywood $776 $600 $500 91607 North Hollywood $884 $880 $720 91324 Northridge $1,104 $880 $720 91325 Northridge $1,104 $880 $720 91326 Northridge$700 $880 $720 91330 Northridge N/A $880 $720 91331 Pacoima $1,104 $880 $720 93550 Palmdale N/A $340 $280 93552 Palmdale N/A $340 $280 93591 Palmdale $1,104 $340 $280 91402 Panorama City $884$600 $500 93553 Pearblossom N/A $340 $280 91335 Reseda $1,104 $880 $720 91340 San Fernando San Fernando, city, Argentina San Fernando (săn fərnăn`dō), city (1991 pop. 144,761), Buenos Aires prov., E Argentina. It is a district administrative center in the Greater Buenos Aires area. $1,104 $880 $720 91350 Saugus $618 $340 $280 91343 North Hills $1,104 $880 $720 91403 Sherman Oaks $484 $880$720 91423 Sherman Oaks $776 $880 $720 93063 Simi Valley Simi Valley (sē`mē, sĭm`ē), city (1990 pop. 100,217), Ventura co., SW Calif. in an oil, fruit, and farm region; laid out 1887, inc. 1969. $1,104 $880 $720 93065 Simi Valley $1,104 $380 $300 91381 Stevenson Ranch Stevenson Ranch, California (in the 91381 ZIP Code) is a Los Angeles County, USA, unincorporated community west of Santa Clarita a few miles south of Six Flags Magic Mountain amusement park. The Stevenson Ranch fountain was redone in 2007. $776 $880 $720 91604 Studio City $484 $600 $500 91352 Sun Valley $1,104 $600 $500 91040 Sunland $1,104 $600 $500 91342 Sylmar $1,104 $340 $280 91356 Tarzana $484 $880 $720 91360 Thousand Oaks Thousand Oaks, residential city (1990 pop. 104,352), Ventura co., S Calif., in a farm area; inc. 1964. Avocados, citrus, vegetables, strawberries, and nursery products are grown. $484 $380 $300 91362 Thousand Oaks $484 $380 $300 90290 Topanga $484 $380 $300 91042 Tujunga $700 $340 $280 91354 Valencia $776 $880 $720 91355 Valencia $1,104 $880 $720 91401 Van Nuys $776 $880 $720 91405 Van Nuys $484 $880 $720 91406 Van Nuys $484 $880 $720 91411 Van Nuys $776 $880 $720 91361 Westlake Village $544 $380 $300 91364 Woodland Hills $484 $880 $720 91367 Woodland Hills $484 $880 $720 SOURCE: Pacific Select Insurance Co. and California Earthquake Authority. INSURANCE POLICY OPTIONS Here is a look at the five earthquake policies being offered by Pacific Select Insurance Co. PREMIER EQ PROTECTOR protector /pro·tec·tor/ (-tek´ter) a substance in a catalyst that prolongs the rate of activity in the latter. : The comprehensive policy. A 10 percent deductible, allows for up to 50 percent coverage of personal property and temporary living expenses up to either $25,000 or 20 percent of the coverage limit, whichever is less. EQUITY PROTECTOR: Covers damage to dwelling dwelling an abnormality of gait in a horse in which there is a momentary hesitation before the foot is placed on the ground. , personal property, loss of use. Deductibles range from 5 percent to 10 percent. SECURITY EQUITY PROTECTOR: Basic policy that is similar to the California Earthquake Authority's mini-policy. Covers damage to dwelling and caps personal property loss at $5,000. Living expenses capped at $1,500. Deductible is 5 percent. SECURITY GAP: This is a supplemental policy for dwellings. Deductible options are 5 percent and 7.5 percent. No coverage for other structures, personal property or temporary living expenses. SECURITY SUPPLEMENT: This covers loss of use and the dwellings contents. Limits for personal property in excess of the basic policy are $25,000, $50,000, $100,000 and $200,000. Loss of use expenses range up to $50,000. SOURCE: Pacific Select Insurance Co. CAPTION(S): Map, Chart, Box MAP: (color) QUAKE COVERAGE With a new company coming into the market, annual rates for earthquake insurance can vary from community to community. CHART: RATES BY THE NUMBERS (see text) BOX: INSURANCE POLICY OPTIONS (see text) |
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