§ 2696.2. Definitions.

For the purposes of these regulations:

(a) “Residential Coverage” means insurance coverage for individually owned:

(1) One to four family dwellings, used exclusively for residential purposes; or,

(2) Manufactured homes, used exclusively for residential purposes; or,

(3) A single family unit within a row house, town house, condominium, planned unit development, or cooperative and used exclusively for residential purposes; or,

(4) Tenant residences located within any residential unit;

(b) “Question of major insurance coverage” shall mean the core determination of whether earthquake, residential property, or automobile collision or physical damage insurance coverage is or is not in dispute. All disputes relating to canceled or non-renewed policies, non-mandated building code upgrades, and claims for damage where there is no underlying coverage involve a question of major insurance coverage and will not be referred to mediation. Disputes including, but not limited to, scope of damage, scope or method of repairs, cause of damage, asbestos or other contaminations, additional living expenses, aftershock damage and disputes over preexisting damage do not concern a question of major insurance coverage and are eligible for referral to mediation;

(c) “Purely legal interpretation” means where the resolution of the dispute rests solely upon interpretation of law, including but not limited to statutes, regulations or case law. All disputes including but not limited to statutes of limitation, contractual deadlines, and allegations of bad faith, the resolution of which involves only a question of law, fall within a purely legal interpretation and will not be referred to mediation. Disputes including, but not limited to, questions of fact and questions of liability do not involve a purely legal interpretation and are eligible for referral to mediation;

(d) “Disputes involving the action of an agent or broker” means where the insurer is not alleged to have been directly involved in the conduct of an agent or broker;

(e) “Frivolous complaint” means any complaint which includes, but is not limited to, a complaint designed to vex or harass or concerns matters of a wholly trivial nature.

(f) “Disputes in which a party is alleged to have committed fraud” means complaints in which the insurer is actively investigating the claim for fraud, including the insurer's compliance with Insurance Code section 1872.4, and there is no possibility of resolving the claim until the fraud investigation has been completed.

(g) “Calendar day” means each and every day including Saturdays, Sundays, Federal and California State Holidays, but if the last day for performance of any act required by these regulations falls on a Saturday, Sunday, Federal or State Holiday, then the period of time to perform the act is extended to and includes the next calendar day which is not a Saturday, Sunday, or Federal or State holiday;

(h) “Mediation” means the good faith participation by an insurer and insured, and their representatives, in a non-binding procedure before a neutral third party directed toward the resolution of a pending claim for damages caused by an earthquake or eligible homeowners, automobile collision, or automobile physical damage loss under a policy of insurance.

(i) “Policy” means the written contract between an insured and an insurance company stating the obligations and responsibilities of each party. A policy may include any applications, binders, declaration forms, endorsements, certificates, and any other documents which describe, affect or limit coverage under the policy;

(j) “Business day” means each and every day except Saturdays, Sundays, Federal and California State Holidays;

(k) “In writing”, as referenced in this subchapter, includes transmission by facsimile (fax).

(l) “Homeowners” means insurance that covers:

(1) Loss of or damage to real property which is used predominantly for residential purposes and which consists of not more than four dwelling units.

(2) Loss of or damage to personal property in which natural persons resident in specifically described real property of the kind described in paragraph (1) have an insurable interest, except personal property used in the conduct of a commercial or industrial enterprise.

(m) An eligible homeowners loss is either a claim that arises under a homeowners insurance policy and that involves a loss due to a fire for which the Governor has declared a state of emergency pursuant to Section 8558 of the Government Code; or a claim that arises under a policy covering earthquake damage and involves loss due to an earthquake for which the Governor has declared a state of emergency pursuant to Section 8558 of the Government Code.

(n) An eligible automobile collision or automobile physical damage claim is a claim that arises under automobile collision coverage or automobile physical damage coverage, in a policy as defined in Section 660 of the Insurance Code.

HISTORY

1. New section filed 10-15-96; operative 10-15-96 (Register 96, No. 42). A Certificate of Compliance must be transmitted to OAL by 2-12-97 or emergency language will be repealed by operation of law on the following day.

2. Repealed by operation of Government Code section 11346.1(g) (Register 97, No. 10).

3. New section filed 3-4-97 as an emergency; operative 3-4-97 (Register 97, No. 10). A Certificate of Compliance must be transmitted to OAL by 7-2-97 or emergency language will be repealed by operation of law on the following day.

4. Editorial correction of subsection (c) (Register 97, No. 33).

5. Certificate of Compliance as to 3-4-97 order transmitted to OAL 7-3-97 and filed 8-13-97 (Register 97, No. 33).

6. Amendment of subsections (b) and (h), new subsections (l)-(n) and amendment of Note filed 12-29-2006; operative 1-28-2007 (Register 2006, No. 52).

Note

Note: Authority cited: Section 10089.83, Insurance Code. Reference: Sections 660, 675, 10089.7, 10089.70 and 10089.83, Insurance Code.