2007 California Insurance Code Chapter 8.5. Earthquake Insurance

CA Codes (ins:10081-10089.4)

INSURANCE CODE

SECTION 10081-10089.4




10081.  No policy of residential property insurance may be issued or
delivered or, with respect to policies in effect on the effective
date of this chapter, initially renewed in this state by any insurer
unless the named insured is offered coverage for loss or damage
caused by the peril of earthquake as provided in this chapter.  That
coverage may be provided in the policy of residential property
insurance itself, either by specific policy provision or endorsement,
or in a separate policy or certificate of insurance which
specifically provides coverage for loss or damage caused by the peril
of earthquake alone or in combination with other perils.




10082.  (a) The offer required by Section 10081 shall include
coverage against risk of loss or damage from the peril of earthquake,
in accordance with the minimum coverages required by subdivisions
(a) and (b) of Section 10089.
   (b) The earthquake coverage shall be in accordance with the
insurer's rules and rating plan, provided, however, that nothing
contained in this chapter shall require an insurer to issue a policy
of residential property insurance except in accordance with the
insurer's usual underwriting standards.  However, those standards
shall not permit an insurer to provide a policy of residential
property insurance unless the offer of coverage required by this
chapter is made.


10082.3.  Notwithstanding any other provision of law, the following
provisions regarding loss requirements, appraisals, and adjusters
shall apply to the following types of policies originated or renewed
on and after January 1, 2002:  all policies of residential property
insurance, as defined in Section 10087, all policies, endorsements,
or certificates of insurance providing coverage for loss or damage
caused by the peril of earthquake issued pursuant to this chapter;
and all policies of basic residential earthquake insurance issued
pursuant to Chapter 8.6 (commencing with Section 10089.5).

      Requirements in case loss occurs

   The insured shall give written notice to this company of any loss
without unnecessary delay, protect the property from further damage,
forthwith separate the damaged and undamaged personal property, put
it in the best possible order, furnish a complete inventory of the
destroyed, damaged and undamaged property, showing in detail
quantities, costs, actual cash value and amount of loss claimed; and
within 60 days after the loss, unless the time is extended in writing
by this company, the insured shall render to this company a proof of
loss, signed and sworn to by the insured, stating the knowledge and
belief of the insured as to the following:  the time and origin of
the loss, the interest of the insured and of all others in the
property, the actual cash value of each item thereof and the amount
of loss thereto, all encumbrances thereon, all other contracts of
insurance, whether valid or not, covering any of said property, any
changes in the title, use, occupation, location, possession or
exposures of said property since the issuing of this policy, by whom
and for what purpose any building herein described and the several
parts thereof were occupied at the time of loss and whether or not it
then stood on leased ground, and shall furnish a copy of all the
descriptions and schedules in all policies and, if required and
obtainable, verified plans and specifications of any building,
fixtures or machinery destroyed or damaged.  The insured, as often as
may be reasonably required and subject to the provisions of Section
2071.1, shall exhibit to any person designated by this company all
that remains of any property herein described, and submit to
examinations under oath by any person named by this company, and
subscribe the same; and, as often as may be reasonably required,
shall produce for examination all books of account, bills, invoices
and other vouchers, or certified copies thereof if originals be lost,
at such reasonable time and place as may be designated by this
company or its representative, and shall permit extracts and copies
thereof to be made.   The insurer shall inform the insured that tax
returns are privileged against disclosure under applicable state law
but may be necessary to process or determine the claim.
   The insurer shall notify every claimant that they may obtain, upon
request, copies of claim-related documents.  For purposes of this
section, "claim-related documents" means all documents that relate to
the evaluation of damages, including, but not limited to, repair and
replacement estimates and bids, appraisals, scopes of loss,
drawings, plans, reports, third party findings on the amount of loss,
covered damages, and cost of repairs, and all other valuation,
measurement, and loss adjustment calculations of the amount of loss,
covered damage, and cost of repairs.  However, attorney work product
and attorney-client privileged documents, and documents that indicate
fraud by the insured or that contain medically privileged
information, are excluded from the documents an insurer is required
to provide pursuant to this section to a claimant.  Within 15
calendar days after receiving a request from an insured for
claim-related documents, the insurer shall provide the insured with
copies of all claim-related documents, except those excluded by this
section.  Nothing in this section shall be construed to affect
existing litigation discovery rights.

      Appraisal

   In case the insured and this company shall fail to agree as to the
actual cash value or the amount of loss, then, on the written
request of either, each shall select a competent and disinterested
appraiser and notify the other of the appraiser selected within 20
days of the request.  Where the request is accepted, the appraisers
shall first select a competent and disinterested umpire; and failing
for 15 days to agree upon the umpire, then, on request of the insured
or this company, the umpire shall be selected by a judge of a court
of record in the state in which the property covered is located.
Appraisal proceedings are informal unless the insured and this
company mutually agree otherwise.  For purposes of this section,
"informal" means that no formal discovery shall be conducted,
including depositions, interrogatories, requests for admission, or
other forms of formal civil discovery, no formal rules of evidence
shall be applied, and no court reporter shall be used for the
proceedings.  The appraisers shall then appraise the loss, stating
separately actual cash value and loss to each item; and, failing to
agree, shall submit their differences, only, to the umpire.  An award
in writing, so itemized, of any two when filed with this company
shall determine the amount of actual cash value and loss.  Each
appraiser shall be paid by the party selecting him or her and the
expenses of appraisal and umpire shall be paid by the parties
equally.  In the event of a government-declared disaster, as defined
in the Government Code, appraisal may be requested by either the
insured or this company but shall not be compelled.

      Adjusters

   If, within a six-month period, the company assigns a third or
subsequent adjuster to be primarily responsible for a claim, the
insurer, in a timely manner, shall provide the insured with a written
status report.  For purposes of this section, a written status
report shall include a summary of any decisions or actions that are
substantially related to the disposition of a claim, including, but
not limited to, the amount of losses to structures or contents, the
retention or consultation of design or construction professionals,
the amount of coverage for losses to structures or contents and all
items of dispute.



10082.5.  (a) If an insurer subject to this chapter charges an
additional earthquake insurance premium or deductible because a
dwelling fails to comply with paragraph (1), (2), (3), (4), or (5)
and the dwelling is subsequently brought into compliance with any one
of these paragraphs, then the additional premium or deductible
attributed to noncompliance shall not be charged.
   (1)  Until December 31, 2008, compliance with the foundation
anchor bolt requirements of subdivision (f) of Section 2907 of
Chapter 29 of the 1991 edition of the Uniform Building Code of the
International Conference of Building Officials, or a successor
building code adopted by the State of California, or with any local
government modifications to those requirements.
   (2)  Until December 31, 2008, compliance with the bracing
requirements for cripple walls of paragraph (4) of subdivision (g) of
Section 2517 of Chapter 25 of the 1991 edition of the Uniform
Building Code of the International Conference of Building Officials,
or a successor building code adopted by the State of California, and
with any local government modifications to those requirements.
   (3) Compliance with Section 19215 of the Health and Safety Code
for the bracing, anchoring, or strapping all water heaters to resist
falling or horizontal displacement due to earthquake motion.
   (4) Commencing on January 1, 2009, compliance with the foundation
anchor bolt requirements of the 2007 edition of the California
Building Standards Code as specified in Title 24 of the California
Code of Regulations, or a successor edition of that code, or with any
local government modifications to those requirements.
   (5) Commencing on January 1, 2009, compliance with the bracing
requirements for cripple walls of the 2007 edition of the California
Building Standards Code as specified in Title 24 of the California
Code of Regulations, or a successor edition of that code, or with any
local government modifications to those requirements.
   (b)  A copy of the approved inspection record for the building
permit for work performed pursuant to this section shall be submitted
by the insured to the insurer in order to verify that retrofits
performed pursuant to this section have been performed.



10083.  (a) The offer of coverage required by Section 10081 may be
made prior to, concurrent with, or within 60 days following the
issuance or renewal of a residential property insurance policy.  If
the offer of coverage is mailed to the named insured or applicant, it
shall be mailed to the mailing address shown on the policy of
residential property insurance or on the application. The offer of
earthquake coverage shall contain the following language in at least
10-point boldface type:

   YOUR POLICY DOES NOT PROVIDE COVERAGE AGAINST THE PERIL OF
EARTHQUAKE.
   CALIFORNIA LAW REQUIRES THAT EARTHQUAKE COVERAGE BE OFFERED TO YOU
AT YOUR OPTION.
   WARNING:  THESE COVERAGES MAY DIFFER SUBSTANTIALLY FROM AND
PROVIDE LESS PROTECTION THAN THE COVERAGE PROVIDED BY YOUR HOMEOWNERS'
INSURANCE POLICY.  THERE ARE EXCLUSIONS AND LIMITATIONS SUCH AS
OUTBUILDINGS, SWIMMING POOLS, MASONRY FENCES, AND MASONRY CHIMNEYS.
THIS DISCLOSURE FORM CONTAINS ONLY A GENERAL DESCRIPTION OF COVERAGES
AND IS NOT PART OF YOUR EARTHQUAKE INSURANCE POLICY.  ONLY THE
SPECIFIC PROVISIONS OF YOUR POLICY WILL DETERMINE WHETHER A
PARTICULAR LOSS IS COVERED AND, IF SO, THE AMOUNT PAYABLE.
   THE COVERAGE, SUBJECT TO POLICY PROVISIONS, MAY BE PURCHASED AT
ADDITIONAL COST ON THE FOLLOWING TERMS:
   (A) AMOUNT OF DWELLING COVERAGE: ____
   (B) APPLICABLE DEDUCTIBLE: ____ IF YOUR LOSS IS BELOW THIS AMOUNT,
YOU MAY NOT RECEIVE ANY PAYMENT FROM YOUR COVERAGE.
   YOUR INSURANCE COMPANY OR AGENT WILL PROVIDE WRITTEN NOTICE AS TO
HOW THE DEDUCTIBLE APPLIES TO THE MARKET VALUE OF YOUR COVERAGE, THE
INSURED VALUE OF YOUR COVERAGE, OR THE REPLACEMENT VALUE OF YOUR
COVERAGE.
   (C) CONTENTS COVERAGE: ____
   IF YOUR LOSS DOES NOT EXCEED THE DEDUCTIBLE FOR THE DWELLING, YOU
WILL NOT RECEIVE ANY PAYMENT FOR THIS COVERAGE.
   YOUR INSURANCE COMPANY OR AGENT WILL PROVIDE WRITTEN NOTICE AS TO
HOW THE DEDUCTIBLE APPLIES TO THE AMOUNT YOU RECEIVE PURSUANT TO THIS
COVERAGE.
   (D) ADDITIONAL LIVING EXPENSES: ____
   (E) RATE OR PREMIUM: ____
   YOU MUST ASK THE COMPANY TO ADD EARTHQUAKE COVERAGE WITHIN 30 DAYS
FROM THE DATE OF MAILING OF THIS NOTICE OR IT SHALL BE CONCLUSIVELY
PRESUMED THAT YOU HAVE NOT ACCEPTED THIS OFFER.
   THIS COVERAGE SHALL BE EFFECTIVE ON THE DAY YOUR ACCEPTANCE OF
THIS OFFER IS RECEIVED BY US.

   (b) When the insurer, agent, or broker establishes delivery of the
disclosure form by obtaining the signature of the applicant or
insured, or when an insurer, agent, or broker provides the applicant
with the disclosure form and the applicant does not return a signed
acknowledgment of receipt within 60 days of the date it was provided,
there shall be a conclusive presumption that the insurer, agent, or
broker has complied with the disclosure requirements of this section.

   (c) The offer may contain additional provisions not in conflict
with or in derogation of this section.
   (d) The commissioner may only approve modifications to the
language prescribed in subdivision (a) if all of the following
conditions are met:
   (1) The modifications are not in conflict with or in derogation of
any provision of this section or Section 10089.
   (2) The modifications are necessary to ensure that the disclosure
statement accurately reflects the coverage actually provided by the
policy being offered.
   (3) The modifications are strictly limited to necessary changes so
that the modified disclosure statement is otherwise identical to the
disclosure statement prescribed in this section.
   (e) Use of the language prescribed by this section, or modified
language approved pursuant to subdivision (d), shall constitute
compliance with the requirements of Section 10081 by an insurer
subject thereto.


10084.  An insurer which issues or delivers a policy of residential
property insurance in this state may comply with the provisions of
Section 10081 in any of the following ways:
   (a) By offering to underwrite directly the risk of loss or damage
caused by peril of earthquake.
   (b) By arranging for earthquake coverage to be offered by an
affiliated insurer.
   (c) By arranging for the coverage to be offered through an
insurance agent or broker under a policy or certificate of insurance
issued by a nonaffiliated insurer.



10085.  If the insurer establishes proof of mailing or delivery of
the required offer and the offer of earthquake coverage is not
accepted by the named insured within 30 days from the date of mailing
or delivery of the offer, there shall be a conclusive presumption
that the named insured elected not to accept the coverage.  An
election, actual or presumed, by any named insured shall be binding
upon any other person insured or any other party having an insurable
interest in the insured property.



10086.  (a) If an offer of earthquake coverage is accepted, the
coverage shall be continued at the applicable rates and conditions
for the policy term, provided the policy of residential property
insurance is not terminated by the named insured or insurer.
   (1) At any renewal, an insurer may modify the terms and conditions
of an existing policy, rider, or endorsement providing coverage
against loss or damage caused by the peril of earthquake if the
modified terms and conditions provide the minimum coverages required
by Section 10089.
   (2) An insurer that modifies the terms and conditions of an
existing policy, rider, or endorsement shall provide the insured with
the renewal notice in a stand-alone disclosure document stating the
changes in the terms and conditions of the insured's existing policy,
rider, or endorsement.  Proof of mailing of the disclosure document
by first-class mail to a named insured at the mailing address shown
on the policy or application creates a conclusive presumption that
the disclosure document was provided.  The disclosure shall include
the following statement in 14-point boldface type:

   THE COVERAGE IN THE POLICY WE ARE OFFERING YOU WITH THIS RENEWAL
HAS BEEN REDUCED, AND SUBSTANTIALLY DIFFERS FROM THE COVERAGES
PROVIDED BY YOUR HOMEOWNERS' POLICY.  INSURANCE COMPANIES ARE ALLOWED
TO RENEW EARTHQUAKE INSURANCE POLICIES WITH COVERAGE THAT IS REDUCED
FROM THE COVERAGE YOU PREVIOUSLY PURCHASED.  YOU MAY REQUEST A
SAMPLE COPY OF THIS NEW POLICY TO REVIEW PRIOR TO MAKING A DECISION
TO ACCEPT THIS RENEWAL, AND WE WILL MAIL OR DELIVER IT TO YOU WITHIN
14 DAYS OF YOUR REQUEST.  A REQUEST FOR THE SAMPLE COPY SHALL NOT
CHANGE OR EXTEND THE POLICY EXPIRATION DATE SPECIFIED IN THE RENEWAL
NOTICE.  A SUMMARY OF THE CHANGES IS INCLUDED WITH THIS NOTICE.

   The commissioner shall approve the form of the summary at the time
he or she approves the policy.  The summary shall include the
information contained in subdivision (a) of Section 10083, and may be
included with the renewal notice in standard type.
   The commissioner may approve substantially similar disclosure
forms if necessary to accurately disclose relevant information to the
policyholder.  The commissioner may also approve disclosure forms
substantially similar to the disclosure statement required by Section
10083 if necessary to accurately disclose relevant information to
the policyholder.
   (3) If the earthquake coverage is provided by a policy issued by
the California Earthquake Authority, the following disclosure shall
be provided in 14-point boldface type:
      CALIFORNIA EARTHQUAKE AUTHORITY POLICY DISCLOSURE

   THIS POLICY IS BEING PURCHASED FROM THE CALIFORNIA EARTHQUAKE
AUTHORITY ("CEA").  THE COVERAGE IN THIS CEA POLICY SUBSTANTIALLY
DIFFERS FROM THE COVERAGES PROVIDED IN YOUR HOMEOWNER'S POLICY.  THE
CEA IS NOT PART OF OR ASSOCIATED WITH YOUR HOMEOWNER'S INSURANCE
COMPANY.  IF LOSSES AS A RESULT OF AN EARTHQUAKE OR A SERIES OF
EARTHQUAKES EXCEED THE AVAILABLE RESOURCES OF THE CEA, THIS POLICY IS
NOT COVERED BY THE CALIFORNIA INSURANCE GUARANTY ASSOCIATION.
THEREFORE, THE CALIFORNIA INSURANCE GUARANTY ASSOCIATION WILL NOT PAY
YOUR CLAIMS OR PROTECT YOUR ASSETS IF THE CEA BECOMES INSOLVENT AND
IS UNABLE TO MAKE PAYMENTS AS PROMISED.  IN ADDITION, YOUR CEA POLICY
MAY BE SUBJECT TO FUTURE SURCHARGES OF THE POLICY PREMIUM IN CERTAIN
CASES WHERE AN EARTHQUAKE OR SERIES OF EARTHQUAKES HAS EXCEEDED
AVAILABLE RESOURCES TO PAY CLAIMS.  IN THAT CASE, THIS MEANS THAT IN
ADDITION TO THE ANNUAL PREMIUM, YOU MAY BE CHARGED UP TO AN
ADDITIONAL 20% OF THE PREMIUM.

   (b) If the offer is not accepted, the insurer or any affiliated
insurer shall be required on an every other year basis to offer
earthquake coverage in connection with any continuation, renewal, or
reinstatement of the policy following any lapse thereof, or with
respect to any other policy that extends, changes, supersedes, or
replaces the policy of residential property insurance.
   (c) Nothing in this section shall preclude the named insured from
terminating the earthquake coverage at any time.



10086.1.  Where the offer of earthquake coverage has not been
accepted, the insurer shall notify the named insured that the policy
does not provide that coverage.  After the offer on an every other
year basis, the notice of noncoverage shall be provided prior to or
concurrent with the renewal of the policy of residential property
insurance.  This section shall not affect any other provisions of
this chapter nor shall it affect coverage under the policy of
residential property insurance.



10086.5.  (a) The Legislature hereby finds and declares that the
continued regulation of the business practices of insurers and their
products is in the interest of the citizens of the state and that the
control and limitation of unlawful nonrenewal, rejection, or
cancellation of residential property insurance after an offer of
earthquake coverage is accepted is an essential component of that
regulation which is necessary to effectuate an adequate and complete
system and regulation of insurer and producer business practices.
The Legislature finds that this chapter continues to provide critical
protection to insureds in this state from the numerous consequences
that would occur in the absence of that regulation.
   (b) An insurer shall not refuse to renew, reject, or cancel a
policy of residential property insurance after an offer of earthquake
coverage is accepted solely because the insured has accepted that
offer of earthquake coverage, except in cases in which the policy is
terminated by the named insured.
   (c) Underwriting standards applicable to residential property
insurance shall not be applied in a discriminatory fashion against
any person who accepts or elects to continue earthquake coverage.




10087.  (a) As used in this chapter "policy of residential property
insurance" shall mean a policy insuring individually owned
residential structures of not more than four dwelling units,
individually owned condominium units, or individually owned
mobilehomes, and their contents, located in this state and used
exclusively for residential purposes or a tenant's policy insuring
personal contents of a residential unit located in this state.
"Policy of residential property insurance," as defined, shall not
include insurance for real property or its contents used for any
commercial, industrial or business purpose, except a structure of not
more than four dwelling units rented for individual residential
purposes.  A policy that does not include any of the perils insured
against in a standard fire policy shall not be included in the
definition of "policy of residential property insurance."
   (b) Proof of mailing of the offer by first-class mail addressed to
a named insured or applicant at the mailing address shown on the
policy or application shall create a conclusive presumption that the
offer was made.


10087.5.  (a) Every policy of residential property insurance which
provides coverage for loss or damage to a structure from the peril of
earthquake, but that provides for an uninsured deductible amount
computed as a percentage, shall clearly disclose on the page setting
forth the policy declarations the basis upon which the percentage is
computed.  This disclosure shall be printed in at least 10-point bold
typeface.
   (b) Every advertisement for a policy subject to subdivision (a)
shall clearly disclose the deductible by stating the applicable
percentage and the basis upon which the percentage is computed.
   (c) Every policy of residential property insurance or policy
endorsement covering an individual condominium unit for loss or
damage from the peril of earthquake shall disclose on the policy
declarations page, in at least 10-point bold typeface, if the policy
or endorsement provides no coverage for loss assessment.  If the
policy or endorsement provides that loss assessment coverage is
limited or changed as a result of any provision of the insurance
policy or policy endorsement purchased by the corporation or
association of property owners, or as a result of an assessment to
pay a deductible amount under the corporation or association policy,
the nature of the limitation or change shall also be disclosed on the
policy declarations page.  If because of lack of space or other
practical limitations the policy declarations page cannot contain the
disclosure required by this subdivision, the disclosure may be
placed on the page immediately following the policy declarations page
and shall be printed in at least 12-point bold typeface.  Nothing in
this subdivision shall be construed to require an insurer to provide
a disclosure for loss assessment if the only limitations on loss
assessment coverage are the policy limits.
   (d) The commissioner shall issue a bulletin that specifies the
language of the disclosure required by subdivision (c).  The
commissioner may specify different disclosures to explain more
accurately different coverages offered by insurers.



10088.  Notwithstanding the provisions of Section 530, 532, or any
other provision of law, and in the absence of an endorsement or an
additional policy provision specifically covering the peril of
earthquake, no policy which by its terms does not cover the peril of
earthquake shall provide or shall be held to provide coverage for any
loss or damage when earthquake is a proximate cause regardless of
whether the loss or damage also directly or indirectly results from,
or is contributed to, concurrently or in any sequence by any other
proximate or remote cause, whether or not covered by the policy.  The
term "policy" as used in this section includes all policies of any
nature, including, but not limited to, business and commercial forms
providing coverage against loss due to damage to the property of the
insured.  Nothing in this section shall operate to affect the
provisions of Section 2071 or preclude an insurer from specifically
providing coverage for direct loss caused by explosion, theft, or
glass breakage resulting from an earthquake.



10088.5.  Notwithstanding Section 2081, nothing in Section 10088
exempts an insurer from its obligation under a fire insurance policy
to cover the losses of a fire which is caused by or follows an
earthquake.


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 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 (,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 (,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 (,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 provided that at least one coverage offered
meets the criteria provided in this section.
   (d) In the case of a residential dwelling which 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.


10089.1.  To the extent that the coverage is not already provided in
the minimum offer of coverage, every insurer shall offer the
following optional coverage as part of the offer of coverage as
required by Section 10081 only after the insured has completed and
the insurer has verified retrofitting of the residential dwelling as
described in subdivision (a) of Section 10089.2:
   Coverage in the amount of ten thousand dollars (,000) for the
purpose of reconstruction costs required to bring the residential
dwelling on the residential property up to required current local
residential dwelling building code standards as required by the local
entity as part of the approval of the reconstruction permit process
after an earthquake.



10089.2.  (a) Subject to the approval of the commissioner, every
insurer subject to this chapter shall, at the time of offering to
issue or offer to renew coverage as part of the offer of coverage
required by Section 10081, disclose to the applicant in writing as a
freestanding document, which brings attention to the applicant, all
discounts or surcharges, if any that are available from the insurer
for that insurance and for any related insurance provided under that
coverage as part of the offer of coverage required by Section 10081.

   The insurer shall provide and disclose in writing any discounts or
surcharges, if any, for earthquake hazard reductions, which shall
include, but not be limited to, retrofitting of the residential
dwelling by tying the structure to the foundation or bracing the
structure to the foundation, reinforcement of the fireplace chimney,
or securing of the hot water heater, and any other discounts that are
available from the insurer.
   (b) Each insurer that offers earthquake insurance through licensed
agents or brokers shall provide in writing the document required in
subdivision (a) and any documents required by subdivision (a) of
Section 10083 to the agents and brokers listing all of the discounts
or surcharges, if any, that are required to be disclosed to the
applicant under this section, and shall require its agents and
brokers to make the disclosures required by this section.
   (c) An insurer is not subject to this section where an insured has
completed earthquake hazard reductions and the insurer has provided
discounts or surcharges for the specific policy in the form of
premium rate changes.


10089.3.  (a) The department shall adopt regulations setting forth
standards governing the training of insurance adjusters in evaluating
damage caused by earthquakes.  For purposes of this section, the
California Earthquake Authority shall make available to the
Department of Insurance the standards used by the authority in order
for the department to develop regulations that are consistent with
the authority's standards.  On or before December 31, 2004, insurers
shall train and accredit adjusters in accordance with these
standards.  Thereafter, an insurer using one or more adjusters who
are not trained and accredited in accordance with those standards
shall submit the names of those adjusters to the department, along
with the claim number of the claim adjusted by that adjuster.  An
adjuster trained and accredited by one insurer pursuant to this
section shall not be required to receive training and accreditation
again in order to adjust claims for a different insurer.  An insurer
using an adjuster who has been trained and accredited by another
insurer pursuant to this section shall not be required to submit the
name of that adjuster to the department.
   (b) For purposes of this section, "insurance adjuster" shall
include the following persons:
   (1) Persons licensed pursuant to Chapter 1 (commencing with
Section 14000) of Division 5.
   (2) Employees of persons licensed pursuant to Chapter 1
(commencing with Section 14000) of Division 5 who perform insurance
adjusting activities as defined in Section 14021.
   (3) Employees of an insurer who perform insurance adjusting
activities as defined in Section 14021.



10089.4.  (a) No person may use a geographically based earthquake
assessment system or program for the purpose of requiring earthquake
insurance, or imposing a fee or any other condition in lieu of
requiring earthquake insurance, in connection with a loan secured by
a condominium project or an individual unit of a condominium project
unless the system's or program's analytical assumptions and
methodology used in the assessment have been submitted to and
approved by the commissioner.  In determining whether to approve a
submission, the commissioner shall consult with and consider the
input of the State Geologist.
   (b) The department may charge a fee to defray the actual cost of
reviewing earthquake risk assessment methods.  Any costs incurred by
the State Geologist or Department of Conservation as required by
subdivision (a) shall be reimbursed by the department.

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