Under the rule, insurance companies are permitted to pass on the cost of reinsurance to consumers, although at an amount that can't exceed an industry standard. Reinsurance is protection that insurance companies acquire to shield themselves from catastrophic claim events. Typical property insurance policies, however, don't generally cover damage from disasters such as earthquakes, floods and landslides. The concern isn't whether insurance companies will pay out for damage but rather how much and how long it will take, Bach said. California does have an insurance program under the Fair Access to Insurance Requirements Plan, established in the 1960s, which provides fire insurance coverage for high-risk properties.

---

Persons: Amy Bach, United, Ricardo Lara, didn't, Morgan, Bach, weren't, Janet Ruiz, Ruiz Organizations: of Insurance, The Insurance Department, Morgan Insurance, Pacific Palisades, State Farm, Farm, Allstate, Mercury Insurance, Insurance Information Institute, NBC Bay Area Locations: Los Angeles, California, Westside, Pacific Palisades, Paradise