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The HOMEOWNER INSURANCE CRISIS 
...and what is happening in the state and federal level.

Provided by The League of California Homeowners, at:  
www.lch.org/lch.....

You are probably aware by now that homeowners in California are 
experiencing an insurance drought which is on the brink of becoming a 
crisis.  The current situation is a result of the Northridge Earthquake 
and the resultant loss of more than $12 billion by insurance carriers.   
For the past  year, all requests for regular homeowners insurance has 
been evaluated first by seismic safety considerations.  This is due to 
the fact that in California, insurance carriers are required by law to 
offer earthquake insurance to everyone who purchases a regular homeowners 
policy (fire, liability & theft).

 In California the price of regular homeowner insurance premiums has 
doubled in the last 18 months. Earthquake insurance has more than 
doubled.  As a consequence of these price increases, the percentage of 
California homeowners who purchase earthquake policies has dropped from  
25% of the statewide total prior to Northridge, to less than 10% today.  
Over 90% of all California homeowners are without any type of earthquake 
coverage at all!  Most people simply cannot afford it!

In an attempt to remedy this situation, the California Insurance 
Commissioner and the State Legislature have proposed the California 
Earthquake Authority plan (CEA).  If this plan is approved in its current 
form, it will be a plan which leans heavily in favor of the insurance 
industry.  Deductibles will be 15%, coverage for content losses will be 
limited to $5,000 and living expenses will be capped at $1,500,  (Yes, 
total living allowance is fifteen hundred!).   As one wag put it, "Were 
the CEA in affect at the time of Northridge, many 'formerly� middle class 
families would have moved into the street."

A better proposal was moving forward on the federal level.  It was titled 
the Natural Disaster Protection and Insurance Act (S-1043).  U.S. Senator 
Ted Stevens (R-Alaska), the bill�s author, and U.S. Senator Daniel Inoye 
(D-Hawaii) attempted to set up a national insurance pool not unlike the 
current flood insurance program.  This would allow private companies to 
participate in a national pool with the knowledge that in a major 
disaster they would not exhaust their reserves.  The pool would be 
further insured by the feds, and if that federal insurance were ever 
needed, then the private carriers would automatically be required to 
reimburse the government out of  future premiums.   Yes, we ultimately 
pay for it as there is no free lunch!  The difference is that we would do 
so in �bearable installments� and not all at once.  It is a rational 
approach that does not require federal �gifts� which are never repaid.

The other advantage is that through S-1043, insurance companies are 
prevented from gouging homeowners with outrageous premiums.  A nice 
change!

Unfortunately, due to a lack of support by the White House and key 
legislators, S-1043 has been taken off the Senate agenda.  Senator 
Stevens says he will not push the bill in 1997 unless sufficient support 
surfaces between now and January, '97.  

IF  YOU WOULD LIKE TO HELP,  -- HERE IS HOW...  	
First, we invite you to join The League of California Homeowners.  By 
becoming a member of The League you not only contribute toward a 
solution, but you benefit from all of The League's other services as 
well.  You can access our background checking service for building 
contractors, be invited to home improvement workshops, become eligible to 
join our credit union, take advantage of  discounts on auto rentals as 
well as cellular and long distance services, plus much more!

Second, you need to write a few letters in support of  S-1043, the 
National Disaster Protection and Insurance Act.  You need to stress the 
problems you are experiencing in order to acquire ordinary homeowners 
insurance here in California which has resulted from the lack of a 
disaster coverage.  You should address your letter to both U.S. Senators 
from California, plus  Senator Ted Stevens of Alaska and your local 
Congressional Representative.   Addresses are as follows:

U.S. Senator Barbara Boxer:	
U.S. Senator Diane Feinstein:
U.S. Senator Ted Stevens:
U.S. Senate, Washington, D.C. 20510
(Each of these Senators can be contacted by phone at:  [202] 224-3121).

Your local U.S. Congressional Representative (call us for help in find 
out who it is if you do not know) at:  Congressman or Congresswoman  
(Name), Member, U.S. House of Representatives, Washington D.C. 20515.  

Third, talk to your friends and neighbors about the problems surrounding 
regular homeowners insurance.  Make them aware of the proposed National 
Disaster Protection and Insurance Act.  Let them know that they can help 
by contacting The League of California Homeowners.

To learn more about The League of California Homeowners, visit our web 
site at:  <www.lch.org/lch>