BILL ANALYSIS Ó
SB 335
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Date of Hearing: June 24, 2015
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
SB
335 (Roth) - As Introduced February 23, 2015
SENATE VOTE: 34-0
SUBJECT: Earthquake insurance.
SUMMARY: Specifies that insurers must prorate earthquake
insurance premium reductions based on seismic retrofitting to
the date the inspection report is received by the insurer, and
deletes obsolete statutory provisions.
EXISTING LAW:
1)Generally provides for the regulation of residential earthquake
insurance.
2)Provides that no homeowners' insurance policy may be offered or
sold in California unless the homeowner is offered earthquake
coverage, either as part of the homeowners' policy, or as a
separate policy.
3)Allows insurers to charge an additional earthquake premium or
deductible if a dwelling fails to comply with specified uniform
building codes.
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4)Provides that if the dwelling is subsequently brought into
compliance with the applicable building code, then the additional
premium or deductible shall not be charged.
5)Requires a copy of the approved inspection record for the work
performed to bring the dwelling into compliance be submitted by
the insured to the insurer to verify that the retrofits have been
performed.
6)Requires personal lines insurers, including but not limited to
homeowners' and automobile insurers, whenever a policy
terminates or there is a reduction in coverage, to refund the
gross unearned premium to the insured within 25 business days
after the insurer receives notice of the event that generated
the unearned premium.
FISCAL EFFECT: Undetermined
COMMENTS:
1)Purpose of the bill . According to the author, this bill
ensures that homeowners who repair or retrofit their homes to
meet required building codes get a refund of any surcharges
for noncompliance they have pre-paid once their home is
brought into compliance.
2)Background . Fewer than 11% of California homeowners purchase
earthquake insurance. Current law allows earthquake insurers
to charge an additional earthquake premium or deductible if a
dwelling fails to meet building standards that reduce the risk
and/or extent of earthquake damage. It also specifies that if
the dwelling is subsequently brought into compliance, then the
additional premium or deductible attributed to non-compliance
shall not be charged. A copy of the approved inspection record
must be submitted to the insurer to verify that the retrofits
have been performed. This bill makes clear that a homeowner is
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entitled to a refund of any premium surcharge as of the date
the reason for the surcharge is eliminated.
REGISTERED SUPPORT / OPPOSITION:
Support
California Association of Realtors
Opposition
None recevied
Analysis Prepared by:Paul Riches / INS. / (916)
319-2086