RANCHO PALOS VERDES, CA — Rancho Palos Verdes will ask California officials to consider creating a landslide insurance program after city staff concluded that a local insurance authority could not directly provide coverage to private homeowners.
The City Council on Tuesday approved sending a letter to state lawmakers and California Insurance Commissioner Ricardo Lara asking them to consider creating a basic landslide insurance program modeled on programs such as the California Earthquake Authority and California FAIR Plan.
The city hopes other communities affected by landslides will join the effort, although no participating cities have yet been confirmed.
City spokesperson Megan Barnes told Patch Thursday that staff will begin reaching out soon to other landslide-affected cities and expects the letter to be sent in the coming weeks.
The city has not yet heard from state lawmakers or Lara's office because the letter has not been sent, Barnes said.
"This is all still in the preliminary stages," Barnes told Patch.
The council's action followed a city staff review of whether Rancho Palos Verdes could establish a joint powers authority, or JPA, to provide insurance for residents whose properties are damaged by landslides.
Staff concluded that California law does not authorize JPAs to provide residential insurance directly to private property owners, according to the city's land movement updates.
JPAs can allow public agencies to pool and manage their own risks, but they cannot simply operate as traditional insurers for private residents under the existing structure, the city found.
That prompted staff to examine two possible state-level alternatives: the California Earthquake Authority and the FAIR Plan. Neither currently provides general insurance coverage for non-earthquake landslides such as the Greater Portuguese Bend Landslide Complex, according to the city.
The California Earthquake Authority can cover damage caused by an earthquake-induced landslide, but its existing authority does not extend to landslides caused by groundwater, rain or other non-earthquake causes. Expanding that authority would likely require state legislation, city staff said.
The FAIR Plan, California's insurer of last resort, also does not currently provide landslide coverage. City staff said state law allows other types of coverage to potentially be added with the insurance commissioner's approval, but it remains unclear whether that authority could be used for non-earthquake landslides.
The issue has particular urgency in Rancho Palos Verdes, where accelerated movement within the Greater Portuguese Bend Landslide Complex has damaged roads, disrupted utilities and affected homes in several neighborhoods.
The city says most homeowners policies generally do not cover damage caused by earth movement, including landslides, land subsidence, sinkholes, slope failure or shifting soil.
Barnes previously told Patch that the city does not know how many Rancho Palos Verdes homeowners currently lack land-movement coverage. However, a September 2024 city survey of landslide-area residents found that none of the 62 respondents who answered a question about insurance reported having coverage for land movement.
Tuesday's action does not create a new insurance program or guarantee that Sacramento will pursue one. Instead, it formally moves Rancho Palos Verdes toward seeking a state-level solution to a problem the city has concluded it cannot solve locally.
The city expects to begin approaching other landslide-affected communities soon before sending the letter in the coming weeks.
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