Earthquake Insurance Affordability Act may become higher priority

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A couple of California Senators have issued a letter calling for a hearing on the law following the recent quake.

In response to the quake that shook the Napa Valley near the end of last month, which has recently caused President Obama to declare the situation to be a major disaster, two senators are now calling for a hearing that will focus on the Earthquake Insurance Affordability Act.

The two senators that issued the news release are Dianne Feinstein (D-CA) and Senator Barbara Boxer (D-CA).

The two senators are hoping that the earthquake insurance law will be the center focus of a hearing by the Senate Banking, Housing and Urban Affairs Committee. The August 25 quake that shook the ground in Napa, California opened the eyes of many people as the risk of a recurrence of this type of event in this and other parts of the state is a considerable one, but the actual rate of coverage among homeowners and business owners is strikingly small.

The senators are hoping that earthquake insurance could be made to be less cost prohibitive.earthquake

The news release issued by Senators Feinstein and Boxer said that “We are deeply disturbed that less than five percent of homeowners and businesses affected by this disaster have earthquake insurance. The California Department of Insurance believes that the high cost of premiums is the reason for such low levels of insurance coverage.”

The lawmakers went on to explain that if the law should actually be enacted, it would mean that more homeowners and business owners would be able to afford this type of insurance coverage. Moreover, it would also boost the level of hazard mitigation that would be adopted by the residents of the state, as they would have premiums discount incentives to encourage them to take these actions to save money on their coverage.

They wrote that this bill would be able to accomplish these goals by forming earthquake insurance programs within the state that are actuarially sound and that would then obtain “federal guarantee of limited borrowing.” Until then, the federal government is currently issuing emergency funds to the state and the Napa Valley is planning its own 4 day fundraising event from September 25 through September 28.

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