New rules for homeowners insurance have been implemented in California to help to protect people when disaster strikes their homes.
The regulations have been implemented to help consumers to make sure that they have the coverage that they need when they have been paying into an insurance policy and the time comes that they need to make a claim following a disaster.
According to Amy Bach, the head of United Policyholders, following a large loss, people frequently discover that they don’t have as much coverage as “they thought they had or they come up against an exclusion that they had no idea was in their policy.”
In order to assist these homeowners from finding themselves with inadequate coverage, the California Department of Insurance has implemented a new set of regulations. Bach explained that agents and insurance brokers aren’t required to assist you with calculating insurance figures, however, if they do provide those numbers, they must be based on reality.
She stated that if brokers or agents provide a customer with a figure and claim that this is the amount of protection that will be needed to protect that customer’s home, then it cannot simply be drawn out of the air. An actual calculation based on real numbers must be performed, sometimes referred to as a “replacement cost estimator”.
These new regulations state that there must be training for agents and brokers to perform this calculation, and that this learning must be an ongoing – not a one-time – process. Although the better insurance professionals have already put these practices into effect, on the whole, the California insurance industry has indicated that it is not thrilled with the new requirements.