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<br />flio*'bails�,ci1 ',01161i Ic aefhlyliftmn Ind hnmiwWiIS ' The ►tc�ob3hal
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<br />yf'r6imirice,retp levels fol thAhdmeow7lft8Mdprem urn turns forfhe aGeS.I
<br />fd3 .''rho.
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<br />salcty,und.seouri!y art lyels programs
<br />�'y Involveinerif ara.provided�
<br />1? lik'WlesPer Policy Plar -.!w,,cin the city hold- i ;r;up insurance policy on t;cha" of the eligil:!e
<br />homeowners. The policy is a non-exclusive conlrac! ',•' ':h. by formal endorsement, sp !!s out the Ienal
<br />�ind financial ielalionship, betv:ccn•tl;c oily and !he:,.. i;r ,nr;.-, r,,;!rW,,C 4j� (g requires cq1
<br />pprdv2C,a city.annouricement to the'homeowners, and acuvc cly pron .. ety.p(ogre
<br />2��[LF,pQgDR!!>BULE1��gY �iily.approves the pmurfiin in conoept and commehd3<i!`:Eifl
<br />4'flizens-as an interestirig'e�hon Among the many insurance choices avellan!nt The city also agrees to
<br />continue to offer its home safety and security program as Ionn as CHIP is active in the city. There is no
<br />contract betv;nen the city and the insurance carriers. Forma! Council action snot necessary, though desira-
<br />ble. Under Ilus plan, legal and fiscal arrangements governing the return of premium savings to the city may
<br />either be contained in endorsements to the insureds homcovrcers policy or provided to the city via a
<br />formal letter from the insurance carrier.
<br />' nnrh lans, covPraOPS am-AiWlahlri for •1-4 family.tl0 lI1 1ng Conddminiums, and h1Ll614
<br />s: with Pie proviso that the ownermustoccupy the premises as a principal pp� p residence a
<br />JMrLequqst and success!q111complete.the city's home safety and secu!ity analysis. Certain art
<br />IigibleSoGUisufanCe plov!Ydirlgxhay.too, complete Fthe home.apaly
<br />Insurance rate structures will vary from state to state and community to community. Rates may also vary
<br />within a community. Generally, CHIP premiums will Pali in the low uart r of those offered by the carriers
<br />writing insurance locally?lniliavatosAll MQMIISM..cssmenPof:ttie^faS'iria
<br />fi'g �eubltc safety system: and`historical loss•experience. AS,;IQ&%-data accumulate,iiaid,r i14
<br />Insurance premiums will be initially pooled statewide by the insurance carrier in order to generate an ade-
<br />quate reserve for losses and expenses. For California the required premium level is $1,000,000 annually, in
<br />aggregate, for all pool participants. When this level is reached, premium savings will be distributed, subject
<br />to a contingency loss reserve fund held in trust, and continue as long as the premium level is maintained. A
<br />common loss ratio, developed by all pool participants will be used in determining the city's share. The
<br />shares will be distributed according to each city's contribution, pro cola, to the earned premium in the state
<br />pool, Ongoing participation in the state pool will not be required of all cities: larger cities may be able to
<br />support their own individual program, or a group of cities may organize themselves, through a JPA for
<br />example, to establish a more regionalized program. It is recommended that cities participate in the pool for
<br />at least 24 months, so that statistically significant loss experience data can be developed. In addition. a 1%
<br />premium retention may be temporarily imposed nationwide to make tip for loss deficits incurred by pools
<br />having unexpectedly large losses, in essence wiping the slate clean each year,
<br />The slab -wide pool enhances every city's prospoct for success. Large losses will be bettor absorbed oil 1
<br />state-wide basis, especially when the program is in its infancy. Smallur cities who would not be able to
<br />support it CHIP because of iolalively low premium volurne potential can gonerate slums Ihrough 1110 poc!.
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