State Earthquake Insurance News: higher premiums in California

Bad news if you are a resident in California, as the California Earthquake Authority have announced that insurance premiums are set to see a 8% rise their insurance premiums, even though insurer contributions to the state agency of California will actually be cut by a third.

In a recent vote a board of directors voted 2-1 that insurance companies will be seeing a $1 billion reduction in the amount of money that will be available to them if people needed to make a claim after a major earthquake. The two board members who voted for this proposal was Gov. Arnold Schwarzenegger and Insurance Commissioner Steve Poizner. Democratic state Treasurer Bill Lockyer was against the proposal.

Backers of this financing plan said that this new proposal will help to potential insurance crisis, it is also thought that it will help to bolster the shaky Californian housing market. Around 755,000 residents in California have an earthquake insurance policy with premiums costing about $700 each, by early next year this new legislation will become law.