California-Specific RulesQuestion 57 of 474
A California homeowner buys a new admitted-carrier homeowners policy and is silent about the earthquake offer that accompanies the application. Under the Mandatory Earthquake Insurance Offer Law, what is the result?
a.The producer becomes personally liable for any earthquake loss
b.Earthquake coverage is automatically added to the policy at the basic CEA limit
c.The insurer must phone the insured to obtain a verbal acceptance before the policy can issue
d.Silence is treated as a decline and no earthquake coverage is in force
Explanation
Under Insurance Code §10081 and §10086, the insurer must make a written offer of earthquake coverage at issuance and at every renewal of a residential property policy. The applicant may accept or decline in writing, and silence is treated as a decline. There is no automatic add-on, no verbal-acceptance requirement, and no personal liability shifted to the producer when the insured does not respond.
Law Reference: Cal. Ins. Code §10081 et seq.; §10086This topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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