Earthquake Insurance Information Bill
Gov. Jerry Brown has signed Assembly Bill 2064, a bill aimed at changing the way Californians learn about earthquake insurance for their homes.
Under California law, insurers that sell residential property insurance also must offer earthquake coverage to their policyholders. The current notice is the only required offer of earthquake insurance that policyholders ever get and hasn’t changed for 30 years.
AB 2064, authored by Assemblyman Ken Cooley, D-Rancho Cordova, makes updates and improvements to the wording and contents of the mandatory offer of earthquake insurance. The bill also will require insurance companies that offer earthquake coverage from the California Earthquake Authority to send an additional communication every year that describes current CEA policy and coverage choices.
“This bill should improve the low take-up rate by using clearer, more consumer-friendly language in mandatory notices,” California Insurance Commissioner Dave Jones said in a statement. “
Along with revising the mandatory notice, AB 2064 will allow the CEA through its participating insurers to provide additional up-to-date earthquake information to their policyholders, including the 8 million Californians without earthquake insurance.
“This additional communication will consistently help educate residents about earthquake risk and CEA product options,” CEA CEO Glenn Pomeroy said in a statement. “With AB 2064’s innovations, more people will get more information about earthquakes, seismic risk, and sensible options for earthquake insurance.”
The updated notice will replace outdated, confusing language, and will bring new opportunities for financial preparedness for earthquakes, according to CEA.
The updated mandatory offer/notice and the annual CEA outreach message will come into effect in January 2016.