(a) If an offer of earthquake coverage, made pursuant to Section 10081, is accepted, the coverage shall be continued at the applicable rates and conditions for the policy term, provided the policy of residential property insurance is not terminated by the named insured or insurer.
(1) At any renewal, an insurer may modify the terms and conditions of an existing policy, rider, or endorsement providing coverage against loss or damage caused by the peril of earthquake if the modified terms and conditions provide the minimum coverages required by Section 10089.
(2) If the modification referenced in paragraph (1) reduces or substantially differs from the coverage previously provided, an insurer shall provide the insured with the renewal offer required by Section 10083 and a stand-alone document stating the changes in the terms and conditions of the insured’s existing policy, rider, or endorsement.
(A) Before July 1, 2020, the stand-alone document shall include the following statement in 14-point boldface type:
“THE COVERAGE IN THE POLICY WE ARE OFFERING YOU WITH THIS RENEWAL HAS BEEN REDUCED, AND SUBSTANTIALLY DIFFERS FROM THE COVERAGES PROVIDED BY YOUR HOMEOWNERS’ POLICY. INSURANCE COMPANIES ARE ALLOWED TO RENEW EARTHQUAKE INSURANCE POLICIES WITH COVERAGE THAT IS REDUCED FROM THE COVERAGE YOU PREVIOUSLY PURCHASED. YOU MAY REQUEST A SAMPLE COPY OF THIS NEW POLICY TO REVIEW PRIOR TO MAKING A DECISION TO ACCEPT THIS RENEWAL, AND WE WILL MAIL OR DELIVER IT TO YOU WITHIN 14 DAYS OF YOUR REQUEST. A REQUEST FOR THE SAMPLE COPY SHALL NOT CHANGE OR EXTEND THE POLICY EXPIRATION DATE SPECIFIED IN THE RENEWAL NOTICE. A SUMMARY OF THE CHANGES IS INCLUDED WITH THIS NOTICE.”
(B) On and after July 1, 2020, the stand-alone document shall include the following statement in 14-point boldface type:
“IMPORTANT NOTICE:
• The extent of the coverage for earthquake damage has been reduced or substantially changed in this renewal.
• You may request a sample copy of this renewal policy for your review prior to making your decision to renew.
• We will mail or deliver that sample copy to you within 14 days. However, your renewal date will not be extended or changed.
• A summary of the changes to your coverage is included with this notice.
• Be aware that your earthquake coverage may have different limits, deductibles, and other limitations than your homeowners’ policy.”
(3) The commissioner shall approve the form of the offer of renewal at the time the commissioner approves the policy. The offer of renewal shall include the information contained in subdivision (a) of Section 10083, and may be included with the renewal notice in standard type.
(4) The commissioner may approve a substantially similar form of the offer of renewal if necessary to accurately disclose relevant information to the policyholder.
(b) This section does not preclude the named insured from terminating the earthquake coverage at any time.
(Amended by Stats. 2019, Ch. 201, Sec. 10. (AB 1813) Effective January 1, 2020.)