No Landslide Insurance? RPV Wants California To Create New Safety Net

RANCHO PALOS VERDES, CA — Rancho Palos Verdes officials exploring whether the city could create an insurance pool for homeowners threatened by the Peninsula's sprawling landslide have hit a major obstacle, they can't.

Now, the city wants California to step in.

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The Rancho Palos Verdes City Council will consider Tuesday night whether to ask state lawmakers and Insurance Commissioner Ricardo Lara to explore creating a landslide insurance program modeled on the California Earthquake Authority or FAIR Plan.

The proposal follows a city review of whether a joint powers authority, or JPA, could provide landslide coverage to private homeowners after conventional insurance proved largely unable to fill the gap. City staff concluded it could not.

While JPAs can provide insurance coverage for participating public agencies, they are not authorized to provide residential insurance to private property owners, according to the city's land movement update.

The insurance problem facing residents is stark.

In a September 2024 survey of landslide-area residents, none of the 62 people who answered a question about insurance reported that their homeowners policy covered land-movement damage, city spokesperson Megan Barnes told Patch Tuesday.

The city does not have a current estimate of how many Rancho Palos Verdes homeowners lack such coverage, Barnes said.

"Land movement is not typically covered, which is why the Council asked staff to look into this," Barnes told Patch.

The city's land movement information says damage related to land movement is not usually covered by most homeowners policies. Standard exclusions often include earth movement, earthquakes, landslides and mudflows.

Specialized difference-in-conditions policies can potentially provide land-movement coverage, but city staff says those policies are nearly impossible to find, extremely expensive and may not currently be available in Southern California.

With a locally created insurance pool apparently off the table, staff is recommending turning to Sacramento.

According to the city's Sept. 1 City Council agenda, council members will consider directing staff to send a letter to state legislators and the California insurance commissioner asking them to consider creating a program providing individuals with basic landslide insurance.

The city points to two existing California insurance mechanisms as possible models.

1. The California Earthquake Authority is a nonprofit provider of residential earthquake insurance whose policies are sold and serviced through participating residential insurers.

2. The California FAIR Plan is the state's insurer of last resort, established to provide basic property insurance when coverage is not reasonably available through the traditional insurance market.

Neither provides the basic landslide insurance program Rancho Palos Verdes is seeking. And so far, the city's proposal has not reached Sacramento.

Barnes told Patch that Rancho Palos Verdes has not discussed the idea with state legislators or Lara's office. Staff's preliminary research is what will be presented to the council Tuesday night.

If the council approves the recommendation, staff will prepare a letter to state lawmakers and Lara urging them to create a program similar to the California Earthquake Authority or FAIR Plan, but for landslide insurance, Barnes said.

The question is particularly acute in Rancho Palos Verdes, where accelerated movement across the Greater Portuguese Bend Landslide Complex since 2023 has damaged homes, roads and utilities and led to utility shutoffs in affected neighborhoods.

The idea of a state-backed landslide insurance safety net also has a remarkable history on the Peninsula.

In February 1998, amid widespread mudslide damage during an El Niño winter, then-California Insurance Commissioner Chuck Quackenbush was considering whether the state should establish mudslide insurance modeled on the recently created California Earthquake Authority, the Los Angeles Times reported.

That report specifically cited the Portuguese Bend landslide and the insurance industry's longstanding reluctance to cover landslide losses. Nearly three decades later, Rancho Palos Verdes is asking California to take another look.

The council is scheduled to consider the proposal during its 7 p.m. meeting Tuesday at McTaggart Hall at Hesse Park.