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California Regulators Seek to Curb Misinformation About Earthquake Insurance.

California Regulators Seek to Curb Misinformation About Earthquake Insurance

The recent earthquakes that pummeled neighborhoods in Ridgecrest and Trona in Southern California have led to reports that some insurers and agents may be declining to write earthquake policies in various areas of the state, according to the California Department of Insurance.

The department is partnering with the California Earthquake Authority to dispel confusion about an alleged "moratorium" on new earthquake policies. In addition, Insurance Commissioner Ricardo Lara is issuing a notice to insurers to ensure that all agents and brokers selling earthquake insurance are following California law.

"Our first major earthquakes in years have Californians asking if earthquake insurance is right for them. I am concerned about reports that some insurers and agents are telling consumers there is a moratorium, when in fact you can buy earthquake insurance today," Lara said in the department's announcement. "While we have Californians' attention, insurers should not create barriers to homeowners or renters who want to protect their assets from earthquakes."

There is 15-day waiting period for coverage after a seismic event but no moratorium on writing earthquake insurance coverage, regulators say.

"CEA policies can be purchased anywhere in California, at any time, and by anyone who has a home insurance policy with one of our participating insurers," CEA CEO Glenn Pomeroy said. "However, for new policies purchased after an event, we do not provide coverage for the next 360 hours, or 15 days, for earthquakes that are seismically related to the initial event."

Lara announced he will issue a notice to insurers advising them that refusing to write CEA earthquake insurance coverage for an existing residential policyholder is not in compliance with state law.

Ridgecrest, Calif., July 6, 2019. (AP Photo/Marcio Jose Sanchez)

Both Lara and Pomeroy believe some insurers may be confusing the 15-day waiting period after a seismic event with an outright moratorium on the purchase of a CEA policy. The Department of Insurance and the CEA will continue to work together to make sure Californians are informed and prepared in the event of another major earthquake.

"If you do not have earthquake insurance, now is the time to look into getting it," added Commissioner Lara. "A standard homeowners' policy will not cover earthquake damage. Without specific earthquake coverage, you are responsible for all costs to repair, rebuild or replace your home and personal property."

The insurance department urges existing CEA customers with damage to begin the claims process by contacting their insurance company or agent

Source: California DOI

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Publication:Insurance Journal
Geographic Code:1U9CA
Date:Jul 12, 2019
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