Bill Text: CA SB1262 | 2011-2012 | Regular Session | Amended

California Senate Bill 1262 (Prior Session Legislation)

Bill Title: Earthquake insurance: coverage.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-04-16 - Hearing postponed by committee. [SB1262 Detail]

Download: California-2011-SB1262-Amended.html

BILL NUMBER: SB 1262	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 26, 2012

INTRODUCED BY   Senator Vargas

                        FEBRUARY 23, 2012

   An act to amend Section 10089 of the Insurance Code, relating to
earthquake insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1262, as amended, Vargas. Earthquake insurance: coverage.
   Existing law requires that an earthquake insurer offer specified
minimum coverage for loss or damage caused by an earthquake that
includes, but is not limited to, contents coverage either in an
amount not less than 10% of the amount of the covered dwelling loss,
or in an amount not less than $5,000, provided that if the underlying
policy of residential property insurance does not cover structural
loss, the amount of contents coverage after deductible is not less
than $5,000.  Existing law authorizes the Insurance Commissioner
to approve rate applications that allow the insurer to offer policies
providing coverage other than the coverage described above provided
that at least one coverage offered meets the criteria of the coverage
described above. 
   This bill would  make technical, nonsubstantive changes to
those provisions   specify that the earthquake
insurance policies providing alternative coverage that may be offered
may include coverage options not meeting the minimum coverage
described above  .
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10089 of the Insurance Code is amended to read:

   10089.  (a) At a minimum, an offer of coverage of loss or damage
caused by the peril of earthquake pursuant to Section 10081 shall
include all of the following coverages: (1) dwelling, not including
outbuildings, appurtenant structures, swimming pools, masonry fences,
and walls not necessary for the structural integrity of the
dwelling, walkways and patios not necessary for regular ingress or
egress from the dwelling, awnings or other patio coverings,
decorative, or artistic features including plaster if other covering
would be more cost-effective, landscaping, or masonry chimneys,
provided that the policy covers replacement of a damaged masonry
chimney with a nonmasonry, earthquake resistant chimney. An insurer
that provides earthquake coverage for the dwelling that is narrower
than coverage provided under the policy of residential property
insurance shall, upon approval of the commissioner, establish the
premium for the earthquake coverage in a manner that reflects the
exclusion of those items not covered by the earthquake policy, rider,
or endorsement; (2) contents coverage either in an amount not less
than 10 percent of the amount of the covered dwelling loss, or in an
amount not less than five thousand dollars ($5,000), provided that if
the underlying policy of residential property insurance does not
cover structural loss, the amount of contents coverage after
deductible shall be not less than five thousand dollars ($5,000). The
insurer shall elect at the time the insurer files its rate
application with the commissioner which of the two contents coverages
it will use to satisfy the requirements of this chapter. Upon
election, the option shall be required to be offered to every
policyholder who receives an offer of earthquake coverage pursuant to
this chapter. In the case of either coverage, the insurer may
exclude from coverage glassware, china, porcelain, or ceramic items,
artwork, or other decorative items; and (3) additional living
expenses of an amount no less than one thousand five hundred dollars
($1,500) to cover expenses while the residential dwelling remains
uninhabitable due to physical loss or damage from the peril of
earthquake.
   (b) Coverages provided in paragraphs (1) and (2) of subdivision
(a) shall not contain a deductible of more than 15 percent of
coverage provided for the dwelling.
   (c) The commissioner may approve rate applications that allow the
insurer to offer policies providing coverage other than the coverage
specified in this section  , including coverage options not
meeting the minimum coverage described in this section, 
provided that at least one coverage offered meets the criteria
provided in this section.
   (d) In the case of a residential dwelling that is not owner
occupied, the minimum coverage for additional living expenses may be
waived by the applicant or policyholder, provided the insurer gives
notice to the applicant or policyholder that coverage for additional
living expenses is offered but may be waived, and the waiver is in
writing.