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AB-1875 Residential property insurance.(2017-2018)

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Date Published: 04/30/2018 09:00 PM
AB1875:v98#DOCUMENT

Amended  IN  Assembly  April 30, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1875


Introduced by Assembly Member Wood
(Principal coauthor: Assembly Member Aguiar-Curry)
(Coauthor: Assembly Member Levine)
(Coauthors: Senators Dodd and McGuire)

January 16, 2018


An act to amend Section 10095.5 of, and to add Section 10103.6 to 10095.7 to, the Insurance Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


AB 1875, as amended, Wood. Residential property insurance.
Existing law generally regulates classes of insurance, including residential property insurance. Under existing law, the California FAIR (fair access to insurance requirements) Plan Association, a joint reinsurance association in which all insurers licensed to write basic property insurance participate, administers a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the association to establish and maintain an Internet Web site and a toll-free telephone number through which a person may receive assistance in applying for basic property insurance. Existing law requires an insurer member of the plan to provide the Internet Web site address and toll-free telephone number to an applicant who is denied coverage.
This bill would require the Department of Insurance to establish the California Home Insurance Finder on its Internet Web site to help homeowners connect with an insurance agent or broker for residential property insurance. The bill would require the department to survey agents, brokers, insurers, and appropriate trade associations about inclusion in the finder, and post participants’ names, addresses, phone numbers, and Internet Web sites to the finder on or before July 1, 2020. The bill would require the commissioner to use social media and other tools to promote the finder, to create materials in multiple languages, and to develop a pamphlet no later than July 1, 2020, that provides information on how to accurately estimate dwelling replacement costs. The bill would require an agent for an insurer that does not offer, or declines to offer, specified extended replacement cost coverage to disclose specified information to a homeowner, including, on or after July 1, 2020, information about the finder.

Existing law requires specified disclosures to be made with the issuance or renewal of a policy of residential property insurance.

This bill would require an insurer to offer extended replacement cost coverage, as specified, when issuing or renewing, on or after January 1, 2019, a policy of residential property insurance, and would require the insurer to disclose the premium costs for extended replacement cost coverage.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NOYES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 10095.5 of the Insurance Code is amended to read:

10095.5.
 (a) The association shall establish and maintain an Internet Web site and a statewide toll-free telephone number through which a person may receive information and assistance in applying for insurance through the plan. The association shall cause the toll-free telephone number to be published in all general distribution telephone directories in the state and shall include the toll-free telephone number and Internet Web site address on all communications with an applicant or insured.
(b) An insurance agent or broker transacting basic property insurance shall assist a person seeking his or her help in obtaining basic property insurance coverage by any one of the following methods:
(1) Making an application for insurance through the plan by submitting an application at the person’s request.
(2) Providing the person with the California FAIR Plan’s Internet Web site address and the toll-free telephone number.
(3) Making an application for insurance, at the person’s request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance coverage.
(c) If an insurer does not offer, or declines to offer, extended replacement cost coverage in an amount no less than 50 percent of coverage above the policy limits for the primary dwelling, other structures, contents, and additional living expenses for a property, the agent shall disclose to the homeowner that policies from other insurers offering extended replacement cost coverage may be available for that property.
(1) Until July 1, 2020, the agent shall provide to the homeowner the contact information of an independent insurance agent in the ZIP Code of the property, if any. The agent shall not incur any liability for providing this information.
(2) On or after July 1, 2020, the agent shall provide to the homeowner information regarding, and assistance accessing, the department’s California Home Insurance Finder.

SEC. 2.

 Section 10095.7 is added to the Insurance Code, to read:

10095.7.
 (a) The commissioner shall establish the California Home Insurance Finder on the department’s Internet Web site. The purpose of the finder is to connect homeowners in need of insurance assistance to an insurance agent or broker to assist in finding residential property insurance.
(1) The department shall survey licensed insurance agents, licensed insurance brokers, and admitted insurers in California regarding inclusion on the finder. The survey shall include trade associations representing insurance agents and brokers regarding inclusion of their insurance agent and broker locator Internet Web site links on the finder.
(2) On or before July 1, 2020, the department shall update the finder with the names, addresses, phone numbers, and Internet Web site links of the licensed insurance agents and brokers, admitted insurers, and insurance agent and broker trade associations that requested inclusion in the finder. The information shall be aggregated by ZIP Code within which the insurance agent, broker, or insurer maintains an office or sells policies, as well as by the languages in which the insurance agent, broker, or insurer may transact insurance.
(3) The department shall use social media and other appropriate tools to make consumers aware of the California Home Insurance Finder. The department shall develop materials in multiple languages to facilitate access to the finder for non-English-speaking consumers.
(b) The commissioner shall develop a pamphlet that provides information to homeowners and others about how to accurately estimate dwelling replacement costs. The pamphlet shall include an explanation of the relationship between the replacement cost estimate and the amount of insurance coverage the policy may provide, as well as the dangers of underinsurance. The pamphlet shall be completed no later than July 1, 2020, shall be posted on the department’s Internet Web site, and shall be published in multiple languages.

SECTION 1.Section 10103.6 is added to the Insurance Code, to read:
10103.6.

A policy of residential property insurance shall not be issued or renewed in California on or after January 1, 2019, unless the applicant or insured is offered extended replacement cost coverage in an amount of no less than 50 percent of coverage above the policy limits for the primary dwelling, other structures, contents, and additional living expenses. The offer shall be accompanied by a disclosure of the premium cost for each additional coverage amount.