HB2863 Summary: Earthquake Insurance Act of 2012

• Creates the Earthquake Insurance Act of 2012 requiring insurers to offer earthquake insurance coverage on residential property insurance policies issued or renewed on or after November 1, 2012.

• Mandates insurers provide a specific written offer containing detailed information about earthquake coverage, including that it may provide less protection than homeowners insurance and has exclusions and limitations.

• Allows insurers to comply through three methods: underwriting directly, arranging coverage through an affiliated insurer, or arranging coverage through a nonaffiliated insurer.

• Requires insurers to re-offer earthquake coverage every other year if initially declined and prohibits insurers from canceling or non-renewing policies solely based on acceptance of earthquake coverage.

• Requires insurers to disclose available discounts and surcharges for earthquake coverage and earthquake-hazard reduction measures (foundation bracing, chimney reinforcement, water heater securing) and prohibits fire insurance exemptions for earthquake-caused fires.