Insurance Commissioner Jones Voices Support for Affordable Earthquake Insurance Legislation
News: 2011 Press Release
Insurance Commissioner Dave Jones announced his support of the Earthquake Insurance Affordability Act, legislation introduced today by Senators Dianne Feinstein and Barbara Boxer.
"I applaud Senator Feinstein's and Senator Boxer's leadership on this important issue and bringing attention to the need for people to be fully prepared for the devastation that can be caused by earthquakes," Commissioner Jones said. "Recent events have shown how significant the impact of an earthquake can be and how critical it is for people to be ready to confront the challenges that arise from such a disaster. And one of the most important ways people can do this is though earthquake insurance. This bill would enable state sponsored earthquake programs to lower the cost of earthquake insurance, increase the amount of coverage provided and lower deductibles at little or no cost to the Federal government. In fact, as more people buy earthquake insurance, the Federal government could even see a reduction in the monies it pays out in disaster assistance after an earthquake."
Under this legislation, the Federal government would guarantee debt issued by a qualified state earthquake insurance program to pay earthquake losses. In order to qualify for the guarantee, the state program would have to demonstrate to the Treasury its ability to pay back any loan that it would seek a guarantee on.
Currently, only 12% of Californians carry earthquake insurance leaving almost 9 out of 10 California homeowners and renters exposed to potentially devastating financial loss in the event of an earthquake. As the recent large earthquakes in Haiti, Chile, New Zealand and now Japan demonstrate, it's not a question of if there will be an earthquake in California it's a question of when. The United States Geological Survey and the California Geological Survey say there is a 99.7% chance of a 6.7 magnitude earthquake or larger striking California in the next 30 years.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California, regulating the $123 billion insurance marketplace. In 2013 the California Department of Insurance received more than 170,000 calls from consumers and helped recover over $63 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.