- Associated Press - Thursday, September 18, 2014

SACRAMENTO, Calif. (AP) - California homeowners will begin getting clearer explanations of how earthquake insurance works and what it covers under legislation signed by Gov. Jerry Brown that is intended to boost lackluster participation in the program.

The governor announced signing AB2064 by Assemblyman Ken Cooley, D-Rancho Cordova, on Thursday.

Cooley’s bill seeks to boost participation in California’s earthquake insurance program, which is offered through the California Earthquake Authority. Just 10 percent of homeowners have such a policy. The rate was even lower, about 6 percent, for homeowners affected by last month’s 6.0-magnitude Napa Valley quake, said Glenn Pomeroy, the authority’s chief executive.

“It made me heartsick to drive around Napa … and realize that many of them did not have earthquake insurance,” he said. “We have our work cut out for us, to get out the word that insurance coverage is not as restrictive as many people think.”

The legislation, which takes effect in 2016, requires that the offer of earthquake policies insurers must send to homeowners be written in plain language that is easily understood.

It also requires insurers to send homeowners marketing materials each year that explain the insurance and the role of the California Earthquake Authority, a state agency that provides policies sold through private insurance companies.

One reason participation is so low is the cost of premiums and the high deductibles before the insurance kicks in, a turn-off for many homeowners who already are paying for general homeowner’s insurance.

Pomeroy said about 25 percent to 30 percent of California homeowners had earthquake insurance before the 1994 Northridge quake, which caused $25 billion in damage. Insurance rates soared afterward.

Cooley said he hopes the changes required under his bill lead to more homeowners understanding the coverage and ultimately buying policies. Property owners whose homes suffer major damage would have to pay for repairs out of pocket if they don’t have earthquake insurance, something most people can’t afford, he said.

“It is a catastrophic coverage,” Cooley said. “But if you are exposed to the risk of earthquake, it’s still valuable.”

Another provision of his bill raises the amount of money available for the California Earthquake Authority’s operations, from 3 percent of policy premiums to 6 percent. Cooley said the change is needed because so few people are buying policies, which in turn affects the authority’s operating budget.

In other bill action announced Thursday, the governor:

- Signed AB2104 by Democratic Assemblywoman Lorena Gonzalez of San Diego, which prohibits homeowners associations from banning drought-resistant landscaping to save water.

- Signed AB1147 by three Democratic lawmakers, which allows local governments to revoke the license of any massage parlor that violates the law. It is intended to make it harder for massage parlors to operate as fronts for prostitution.

- Vetoed AB2029 by Democratic Assemblyman Ken Cooley of Rancho Cordova, which would have required county coroners to urge parents and guardians whose child dies from Sudden Infant Death Syndrome to take tissue samples. Brown said it would be better to rely on coroners to use their best professional judgment.

- Vetoed AB2198 by Democratic Assemblyman Marc Levine of San Rafael, which would have required suicide prevention training for psychologists and counselors by requiring them to complete additional coursework. Brown says he will ask the relevant licensing boards to evaluate the issue.

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