It’s one product you purchase hoping you’ll never have to use. Depending on where you live and what type of lifestyle you lead, you may need different types of insurance coverage to adequately protect you and/or your property from loss or damage. For instance, earthquake insurance is available for residents in California. If you spend a good deal of time on the road, you may want to consider extended auto insurance to ensure recovery from damage.

In California, the California Department of Insurance (CDI) licenses and regulates the rates and practices of insurance companies, agents and brokers in the state. Currently, CDI licenses more than 1,500 insurance companies and more than 340,000 agents and brokers. The CDI has authority over how the insurance industry conducts business within California with specific oversight, including:

•         Enforcement – legal action is the ultimate enforcement instrument of the Department.

•         Consumer protection

•         Licensing

•         Criminal investigations

•         Certificates of authority

•         Conservation and liquidation

•         Rate regulation

•         Financial surveillance

More information can be found at CDI’s website at www.insurance.ca.gov/ or by calling 800-927-HELP (4357) (from within Calif.) and 213-897-8921 (outside Calif.).

Auto Insurance

According to CDI, the responsibilities of owning and driving an automobile include following the financial responsibility laws under the vehicle code. The most common way to satisfy the financial responsibility for operating an automobile in California is by purchasing automobile liability insurance. The statutory minimum limits of liability insurance in California* are as follows:

Bodily Injury Liability

•         $15,000 for death or injury of any one person, any one accident.

•         $30,000 for all persons in any one accident.

Property Damage Liability

•         $5,000 for any one accident.

There are four ways to accomplish financial responsibility:

1.         Coverage by a motor vehicle or automobile liability insurance policy;

2.         A cash deposit of $35,000 with the DMV;

3.         A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or

4.         A surety bond for $35,000 obtained from an insurance company licensed to do business in California.

All California drivers and owners must have at least the statutory limits of minimum liability insurance or an approved alternative way to pay for injury or property damage they may cause. Penalties are very severe for non-compliance with this section of the vehicle code. When your car is in an accident for which you are found legally liable, bodily injury
(BI) liability covers your liability to others for injuries to them. Property damage (PD) liability covers your liability for damage to someone else’s property. A policy with BI of $15,000/$30,000 and PD of $5,000 will pay out as follows:

•         The maximum limit for one person’s injuries, medical expenses, etc. is $15,000 under the bodily injury portion;

•         If two or more people are injured, the maximum limit for the accident will be $30,000;

•         The maximum limit for damage to other people’s property (their car, their fence, etc.) is $5,000.

The law does not require comprehensive coverage (other than collision), uninsured motorist, medical payments and collision insurance.

In California, it is the responsibility of each driver to provide liability insurance for any vehicle owned, regardless of who is operating the vehicle. It is illegal for vehicles to be operated without meeting the requirements of this law. If you have an accident not covered by insurance, then your license may be suspended.

All California residents must show proof of insurance before the Department of Motor Vehicles (DMV) renews the vehicle registration. New legislation also requires motorists to display proof of insurance when they are stopped by a police officer for traffic violations. Those who cannot may be subject to fines and other penalties.

When you buy an insurance policy, your insurance provider will send you proof of insurance card listing the covered automobiles and drivers, the policy number and expiration date. Your policy or a temporary binder also is acceptable evidence of insurance.

In California, driving without insurance is a serious offense. Failure to show proof of insurance when requested may result in fines or a suspended license. If you are stopped by a police officer and asked for proof of insurance and you can’t produce it, you may receive a citation. You can have the ticket nullified by showing proof of insurance in court. You could, however, be assessed an administrative fee for expenses.

Proof of financial responsibility must be shown when you:

•         Are asked for it by a law enforcement officer;

•         Have an accident;

•         Register your car or renew its registration; or

•         Get your car inspected

It is important that when selecting insurance coverage, you compare before deciding on a policy. Under California’s premium rating law, each insurance company is allowed to calculate its own rates based on its past loss experience and expenses. Since each company’s experience will differ, even within the same geographic area, the rates will therefore differ. By calling several companies, or brokers/agents for a rate comparison, you can potentially save money. You will then be able to choose the company with the best available price and coverage to suit your individual needs. There are many sources you can contact to evaluate policies and premiums, including the following organizations:

•         Independent insurance brokers/agents;

•         Company agents who represent one company;

•         Direct writers: insurance companies that sell direct to the public;

•         Websites

Health Insurance

One of the most important decisions a new resident can make is finding a family physician. If your employer offers health insurance, visit your company’s human resources office. Your employer can usually provide you with literature about hospitals and doctors that will accept the company’s insurance. The San Francisco Medical Society’s website at www.sfms.org offers a physician finder that can be searched by specialty, location or doctor’s last name.

Family, friends and co-workers are also a good resource for finding a physician. Ask what the people like best and least about their doctors. When searching for a physician, make sure the doctor is board certified. All U.S. board-certified physicians are listed with the American Board of Medical Specialties. Visit (www.abms.org) or call 866-272-2267. The American Medical Association provides information about U.S. licensed physicians at www.ama-assn.org.

Another resource is the Medical Board of California (www.medbd.ca.gov). This site can help you learn everything public about a medical doctor licensed by the state of California. For additional information, call 916-263-2382.

Types of Health Plans

Health insurance pays for expenses incurred for diagnosis and treatment of covered medical conditions. At the California Department of Insurance website (www.insurance.ca.gov), five different types of health plans are explained.

Indemnity Policies (traditional fee-for-
service insurance)

Highlights:

1.         Choice of doctor, specialist or hospital with few limitations.

2.         Not limited by geographic restrictions.

3.         There may be a deductible before covered medical benefits are reimbursable.

4.         A co-payment for covered medical services may be required.

5.         There is assistance from the CDI for questions regarding any indemnity policy issued by an insurance company admitted in California.

Preferred Provider Organizations

Highlights:

1.         There is the highest monetary benefit when staying within the PPO network.

2.         There is the option to go outside the PPO network at a higher monetary cost to you.

3.         Any doctor or specialist referred to you should be checked to ensure they are part of the PPO network before services are utilized.

4.         PPOs can be regulated by either the CDI or the Department of Managed Health are (DMHC) depending on if the company that issued the contract is a licensed insurance company or a managed care plan. PPOs can also be self-funded. If you need assistance and you are not sure which agency regulates your plan, you can contact the CDI or the DMHC for clarification.

Health Maintenance Organizations (HMOs or Managed Care)

Highlights:

1.         Health care services are obtained from HMO providers, except in certain emergency situations.

2.         The choice of primary care physician is important because he/she directs your care. Also, the primary care physician often coordinates referrals to specialties within the HMO.

3.         Options may be limited by the geographic restrictions of the HMO network.

4.         There may be a small co-payment charge each time you utilize an HMO covered service.

5.         You can seek assistance from the DMHC on all HMO and managed care questions.

Self-Insured Health Plans (Single Employer Self-Insured Plans)

Highlights:

1.         If you work for a large employer, have a union affiliation, work for a school district or work for a municipality, the health plan offered to you may be a self-insured entity.

2.         An insurance company or a third-party administrator (TPA) may administrate a self-insured health plan.

3.         Self-insured health plans are most likely subject to federal ERISA law.

4.         If your self-insured health plan is not a school district, other municipality or a church, you can seek help from the DOL-EBSA.

5.         If your self-insured health plan is a school district, other municipality or a church, you may seek assistance from the plan directly or from the courts.

Multiple Employer Welfare Arrangements (MEWAs)

Highlights:

1.         Your employer may offer a MEWA health plan if they are an employer member of a trade, industry, professional or other association.

2.         There are currently less than 10 MEWAs operating with CDI certificates of compliance.

3.         You can contact the CDI for any questions regarding MEWAs.

Here is additional consumer information to know about individual and group health insurance coverage:

•         Health insurance coverage is sold to consumers under either individual or group policies.

•         Individual and association group policies are subject to medical underwriting on an individual basis.

•         Qualifying creditable coverage must be applied toward the year waiting period for pre-existing conditions in individual policies and towards the six-month waiting period for pre-existing conditions in group policies.

•         Small group policies require that coverage be offered on a guaranteed issue basis regardless of any pre-existing condition

For more information, there are several ways to contact the California Department of Insurance.

Phone:

(800) 927-HELP

E-mail through the website at:

www.insurance.ca.gov

Write: California Department of Insurance

300 South Spring St., South Tower
Los Angeles, CA 90013

Homeowners Insurance

If you own a home or are purchasing a home, you need homeowners insurance. It protects you from financial losses caused by storms, fire, theft and other events outlined in your policy. It is important to buy enough coverage to avoid a major financial loss if your home is severely damaged or destroyed. This means keeping a realistic dollar amount of coverage on your house.

Tips

Before you buy homeowners insurance:

•         Take the time to shop around for homeowners insurance. Compare prices, service and coverage. The CDI is pleased to offer online premium comparisons that cover more than 90 percent of California’s homeowners insurance market. You can receive these comparisons via the CDI website at www.insurance.ca.gov or by calling the CDI Hotline at 1-800-927-HELP.

•         Provide the most complete and accurate information to your agent or broker when requesting a premium quote or completing an insurance application.

•         Read all applications or finance agreements before signing. Read them again after you have filled them out completely (and before you sign) in order to check and see if everything is correct. Never sign a blank form or something that you do not understand. Keep a copy of all signed documents in a safe place for your records.

•         Review and read your policy when you receive it. Don't file it without checking to see that the coverage, limits, premium and other information are correct. Also, read through the policy carefully to identify your rights and obligations and the company's rights and obligations under the terms of the policy.

•         Keep an inventory of personal property, listing all of the items you own, the dates purchased and the price. If possible, take pictures of important and valuable items. You may want to videotape your home and possessions as well. Keep these records in a safe place away from home, preferably in a safe-deposit box. Also, periodically update your inventory, appraisals, photos and videotape. This will help you to file and settle a claim quickly and efficiently.

Source: California Department of Insurance

What Insurance Covers

Typical homeowners coverage insures your dwelling, other structures and contents and may cover against losses such as:

•         Fire or lightning

•         Windstorm or hail

•         Breakage of glass

•         Explosion

•         Riot or civil commotion

•         Theft

•         Aircraft

•         Vehicles

•         Smoke

•         Vandalism and malicious mischief

Extending Coverage

Additional coverage can be purchased to protect your home and contents beyond the standard coverage limitations in most homeowners policies. Ask your insurance agent or broker about available endorsements to extend coverage. Endorsements to coverage such as building code upgrade can greatly add to your protection in a loss. You may also want to consider separate earthquake coverage or flood insurance, as these types of hazards are specifically excluded in most homeowners insurance policies. 

Your policy also covers loss of use, including increases in living expenses due to fire or other insured loss. It is a good idea to be familiar with the coverage provisions for living expenses and include the information in your regular disaster plan in case of emergency.

Liability coverage protects you for injuries or damages to others caused by you, a member of your family or pet. Medical payments insurance covers medical expenses to non-family members injured at your home.

It’s important to read exclusions in your insurance contract. Earthquake, flood, mold, earth movement and “wear and tear” are some of the perils that are usually excluded. When an insurer writes your homeowners coverage, the insurer is legally obligated to offer you earthquake coverage for an additional premium. The earthquake coverage may be written directly by the homeowner’s insurer, by a separate insurer or through the California Earthquake Authority (CEA).

Tenants (renters) insurance covers the loss of personal property and loss of use due to the above-mentioned perils, and may include liability and medical payments coverage.

Condominium insurance is similar to tenants insurance and covers personal property and improvements. Loss of use is generally limited to 40 percent of the contents limit. The condominium association generally purchases insurance for the building structure and common areas, such as corridors. Loss Assessment Coverage can be an important policy provision for you. It covers you for certain assessments the condominium association makes. However, you should check if it covers you for earthquake losses and how much it will provide you in the event of an earthquake loss. You should also carefully analyze the type of insurance your association has and how it would affect you in the event of a loss. Most condominium association policies cover the common areas and walls. Your condominium owner’s policy will cover interior damage to your unit.

Earthquake Insurance

Many property owners utilize earthquake insurance to help defray the expense of costly earthquake repairs. Residential property insurers are required under California Insurance Code (CIC) Section 10081 to offer earthquake coverage for the peril of earthquake. The mandatory earthquake offer must:

•         Be made in writing

•         Describe coverage amounts

•         List the deductible offered

•         State the policy premium

You have 30 days from the date of mailing from the insurance company to accept the offer of earthquake coverage. If your homeowners insurance company does not receive a response from you, then they consider the offer rejected. Your insurance company is only required to make the offer of earthquake coverage every other year. The law prohibits an insurer from canceling, rejecting or refusing to renew a residential property policy solely because the policyholder has accepted the offer of earthquake coverage.

Earthquake Coverage

Every offer of earthquake insurance must provide coverage for your dwelling, for your personal property (not less than $5,000 or 10 percent of the covered dwelling loss) and for any additional living expense (ALE) of at least $1,500. You may waive ALE coverage if you or your family do not occupy the dwelling you wish to insure. CIC Section 10089(b) states that the maximum deductible that can be charged is 15 percent of the policy dwelling limit. If you desire earthquake insurance offering more than the minimum limits and a deductible less than the maximum established by law, then you may contact your current residential property insurer or earthquake insurer to see if higher limits or lower deductibles are available.

You may want to contact a broker-agent to assist you with securing a “stand-alone” policy, which can be offered by a few specialty insurance companies that do not require you to purchase your homeowners insurance from them in order to offer you earthquake coverage. They offer a stand-alone policy, which is referred to as a monoline policy (one line of insurance) by the insurance industry.

ALE coverage is designed to pay for the cost associated with living somewhere else while repairs are being made to your home. Typically your insurer will cover increases in your normal living expenses to help you maintain the standard of living you had before an earthquake damaged your home and personal property. ALE coverage can include costs for the following:

•         Temporary rental home, apartment or hotel room

•         Restaurant meals

•         Telephone or utility installation in a temporary residence

•         Relocation and storage

•         Furniture rental

•         Laundry

Payment on ALE coverage is limited to the reasonable time required to repair or rebuild your home or for you to permanently settle in another residence. It is important to note that ALE only covers the extra amount you have to pay in order to maintain your normal standard of living while outside your home. ALE coverage can also pay costs you may incur due to the police or other civil authority denying access to your home in the event of an evacuation.

Bay Area Red Cross Offices

Alameda

Oakland Service Center

3901 Broadway
Oakland, CA 94611
510-595-4400

City of Alameda Service Center

451 Stardust Place
Alameda, CA 94501
510-814-4200

Union City Training Center

33641 Mission Blvd.
Union City, CA 94587

Livermore Training Center

373 North L. St.
Livermore, CA 94550

Contra Costa

Concord Training Center

1300 Alberta Way
Concord, CA 94521

Marin

San Rafael Training Center

712 5th Ave.
San Rafael, CA 94901

San Francisco

Chapter Headquarters & Service Center

85 Second Street, 8th Flr.
San Francisco, CA 94105
415-427-8000

San Mateo

Burlingame Service Center

1710 Trousdale Dr.
Burlingame, CA 94010
650-259-1750

Solano

Fairfield Training Center

1545 N. Texas St., Ste. 102
Fairfield, CA 94533

Travis Air Force Base

David Grant Medical Center
2nd Floor 604-2A 101 Bodin Circle
Travis, CA 94535
707-423-3647

Title Insurance

Title companies provide a very valuable service during the home-buying process. A title company is responsible for researching abstracts or actual deed records, lawsuits, tax records, liens and other documents to make sure no one else has an ownership claim against a property. Once the title company determines a clear title, it will issue an insurance policy to the mortgage company and the buyer to guard against any title defects that might show up later.

In addition to researching the title to a property, a title company also serves as the host on closing day. Often the real-estate agent, buyer, seller and title representative will meet at the title company to sign closing papers. After all papers are signed, the title company will file the necessary documents with the county to validate the sale.

Title insurance protects against:

•         Fraud

•         Forged deeds, releases or wills

•         Undisclosed or missing heirs

•         Liens for unpaid estate, inheritance, income or gift taxes

•         Instruments executed under invalid or expired power of attorney 

•         False impersonation of the true owner of the property

•         Mistakes in recording legal documents 

•         Deeds by minors or by persons supposedly single, but in fact, married

•                   Misinterpretations of wills