Resolution 1995-75
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RESOLUTION NO. 95 - 75
RESOLUTION OF THE COUNCIL OF THE CITY OF GILROY RELATING TO HOMEOWNERS AND
EARTHQUAKE INSURANCE.
WHEREAS, having suffered substantial losses in California due to
catastrophic natural disasters, ninety-three percent (93%) of insurance carriers
have either ceased or severely limited writing new homeowners policies in
California, and some carriers have banned new policies i~ specific geographic areas
of the state; and
WHEREAS, California homeowners are facing a crisis due to the lack of
affordable, readily available homeowners insurance; and that crisis is having far-
reaching effects on the state#s homebuilding and real estate industries; and
WHEREAS, the insurance companies have failed to recognize the
extraordinary measures of local co~unitieB who have taxed and assessed themselves
to fund needed improvemellts to fire prevention and emergency preparedness and-
response; and
WHEREAS, the State insurance Commissioner has directed all insurers,
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beginning with rate applications filed after January 1, 1996, to provide homeowners
insurance rate credits (discounts) where communities have adopted specific,
community-wide fire mitigation measures designed to reduce the risk of wide-spread
fire and limit the damage caused residential area fires, and where the benefits
that arise from those measures can be rated and supported by actuarial opinion; and
WHEREAS, efforts to negotiate a new mechanism for catastrophic
insurance coverage have not yet achieved a resolution that is economically viable
and fair to all parties throughout the state; and
WHEREAS, the crisis to all Californians has become so severe that it
demands urgent attention and speedy resolution.
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RESOLUTION NO. 95 - 75
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NOW, THEREFORE, BE IT RESOLVED, by the General Assembly of the League of
California Cities, assembled in Annual Conference in San Francisco, OCtober 24,
1995, that the League support legislation and regulatory action that advance the
following principles:
1) that the delinkage of earthquake and homeowners insurance should
only occur after state and/or federal natural disaster insurance
pools are established to provide affordable and adequate earthquake
coverage;
2) that basic catastrophic coverage should be provided to restore a
home's habitability, and that such basic coverage should be
available with minimal deductible and without any cap on insured
value;
3) that all insurance companies offering any type of insurance in
California should be required to pay an assessment to the statewide
catastrophic insurance pool to ensure its continued viability;
4) that when setting rates and determining risk, insurance companies
should be required to take into account the existence of local
programs to upgrade emergency infrastructure and/or to reduce fire
fuels such as wildland brush in public open space and overgrown
vegetation within household perimeters in compliance with local and
state fire cades;----- . -..----.-- --~- --------~--.-
5) that nonrenewals of insurance should be subject to the same
restrictions as cancellations, and that these principles should be
clearly outlined in the legislation; and that insurance companies
should be required to maintain existing homeowners# policies as long
as policyholders meet the underwriting guidelines specified in the
legislation;; and
BE IT FURTHER RESOLVED, that the League calla upon the State Legislature
and the Insurance Commissioner to resolve the crisis in the availability and
affordability of homeowners insurance in order to protect the state economy and the
safety and well-being of all California property owners; and
BE IT FURTHER RESOLVED, that the League create a Task Force of the
Public Safety Committee to work with cities, the Insurance Commissioner and the
industry to develop standards for eligibility for risk reduction credits in the
homeowners insurance rate structure; and to develop and promote model risk
reduction programs for cities that will qualify their homeowners for the reduced
rate structure; and
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RESOLUTION NO. 95 - 75
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BE IT FURTHER RESOLVED, that the League, through the National League of
Cities, support the enactment of these principles in the federal natural disaster
insurance pool legislation currently before Congress.
PASSED AND ADOPTED this 16th day of October, 1995, by the following
vote:
AYES:
COUNCILMEMBERS: GILROY, KLOECKER, MORALES, ROGERS, ROWLISON,
VALDEZ and GAGE.
COUNCILMEMBERS: None
NOES:
ABSENT:
COUNCILMEMBERS: None
Mayor
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RESOLUTION NO. 95 - 75
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I, SUSANNE E. STEINMETZ, City Clerk of the City of Gilroy, do
hereby certify that the attached Resolution No. 95-75 is an original
resolution, duly adopted by the Council of the City of Gilroy at a regular
meeting of said Council held on the 16th day of
October
, 19..l!.L,
at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
Official Seal of the City of Gilroy this 17th day of
. october
,1995.
City Clerk
(Seal)
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