California’s Office of Administrative Law (OAL) has approved regulations designed to combat underinsurance and may require insurance agents and brokers to complete additional training. The regulations will take effect June 27, 2011.
The Standards and Training for Estimating Replacement Value on Homeowners Insurance:
- Require all California resident fire and casualty broker-agents and personal lines broker-agents, who have not already done so, to satisfactorily complete one three-hour training course on homeowners’ insurance valuation prior to estimating the replacement value of structures in connection with, or explaining the various levels of coverage under, a homeowners’ insurance policy;
- Require insurers, agents and brokers that provide replacement cost estimates to applicants and insureds to document who created the estimate and the sources or methods used to create the replacement cost estimate; and
- Require that all replacement cost estimates communicated to applicants or insureds be complete, based upon specifically enumerated standards set forth in the regulations.
State Insurance Commissioner Steve Poizner initially proposed the underinsurance regulations to address a problem of homeowners finding they have inadequate insurance coverage, especially after major wildfires.
“Early in my tenure as Insurance Commissioner, I witnessed the problem of underinsurance when I toured the site of the San Diego wildfires. I promised then that I would address the problem of underinsurance, and with the approval of these regulations I believe I have fulfilled that promise,” Poizner said. “Consumers face several complicated choices when buying homeowners insurance and they need reliable and complete information in order to make good decisions. These new regulations deliver on both of those fronts.
The regulations represent the third and final phase of Commissioner Poizner’s plan to reduce underinsurance, the Department of Insurance announced. Poizner had previously called for regulations that would provide more comprehensive and reliable estimates of what it might cost to completely rebuild a destroyed home. Such estimates were previously unregulated and led homeowners to believe they needed less coverage than they truly did in the event of a disaster.
Was this article valuable?
Here are more articles you may enjoy.