Earthquake Insurance      
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    Earthquake Insurance (California)

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    California Earthquake Insurance


    This portion of website is taken of CEA site with permission in order to inform potential clients.

    Homeowner

    The CEA homeowners policy is designed to help get you back into your home after an earthquake. The CEA base-limits policy for homeowners includes:

    Dwelling coverage - The coverage limit is the insured value of your home stated on your companion homeowner policy.
    Personal Property coverage - $5,000
    Additional Living Expense/Loss of Use coverage - $1,500
    You may select either a 10% or 15% deductible on your Dwelling coverage, and CEA’s increased-limit options allow you to increase Personal Property coverage to as much as $100,000 and Additional Living Expense/Loss of Use coverage to as much as $15,000.

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.

    California Earthquake Authority



    Personal Property Coverage (Coverage C)

    Personal Property coverage protects many items in the typical home, including furniture, TVs, audio and video equipment, household appliances, bedding, and clothing.

    A base policy provides up to $5,000 to replace personal property, but you can increase your Personal Property coverage to as much as $100,000.


    Dwelling Coverage (Coverage A)

    Dwelling coverage helps protect the investment you have made in your home. It will help pay to repair or, (up to the policy limit) replace, an insured home when structural damage exceeds the policy deductible. You may select a 10% or 15% deductible for your Dwelling coverage.

    The insured value of your home, as stated on the declarations page of your companion homeowners insurance policy, determines the Dwelling-coverage limit of your CEA earthquake policy. If your home's insured value changes in your homeowners policy, the insured value for your earthquake coverage will change, too, and that will affect your earthquake-policy premium.

    Personal Property Coverage: Increased-Limit Options
    Base
    Coverage Option
    1 Option
    2 Option
    3 Option
    4
    $5,000 $25,000 $50,000 $75,000 $100,000

    Additional Living Expense/Loss of Use Coverage (Coverage D)

    If damage from an earthquake prevents you from living in your home, your CEA policy may pay for necessary increases in living expenses you incur to maintain your normal standard of living.
    CEA Additional Living Expense/Loss of Use coverage on a property you own and rent to tenants can help protect your rental income, to the limit of that coverage.
    A base policy provides $1,500 of Additional Living Expense coverage or you can increase that coverage to as much as $15,000.
    Additional Living Expense Coverage: Increased-Limit Options
    Base
    Coverage Option
    1 Option
    2
    $1,500 $10,000 $15,000

    Additional Coverages

    Limited Building Code Upgrade

    In most California communities, repairing or rebuilding a home after an earthquake must be done according to current building codes. In addition to providing funds for repairing or replacing your home, the CEA base policy includes an additional $10,000 in Building Code Upgrade coverage.
    Option to Increase Building Code Upgrade Coverage

    For policies that renew or become effective on or after July 1, 2006, homeowners can choose to increase Building Code Upgrade coverage by an additional $10,000, for a total Building Code Upgrade coverage limit of $20,000.

    Items Not Covered
    Dwelling-Related Items

    Your CEA policy excludes some items from dwelling coverage. A partial list of items that are not covered includes:

    Detached garages and most other structures that are not part of the dwelling
    Land damage (other than $10,000 in coverage for land stabilization)
    Swimming pools and spas
    Awnings and patio coverings
    Fences, landscaping, and irrigation systems
    Antennas and satellite dishes
    Patios and decks
    Walkways and driveways not needed for pedestrian or disabled access to your home
    Certain decorative or artistic items such as mirrors, chandeliers, stained glass, or mosaics

    Personal Property

    A partial list of personal property items not covered by your CEA policy includes:

    Animals, birds, or fish
    Artwork, photographs, and ceramics
    Motor vehicles (such as cars, trucks, and motorcycles), riding lawn mowers, trailers, golf carts, and watercraft
    Glassware, crystal, porcelain, and china
    Spas and hot tubs

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.
    Coverage Sublimits
    Sublimits - Dwelling Coverage

    Once damage to your dwelling has exceeded your CEA policy’s deductible, the policy covers reasonable emergency repairs in an amount up to 5% of the insured value of the home as part of the dwelling limit of insurance.

    As part of the dwelling limit of insurance, your CEA policy will pay up to $10,000, including engineering costs, to replace, rebuild, stabilize, or otherwise restore land you own that is necessary to support your home. The policy does not provide any other coverage for land.
    If your dwelling has one or more chimneys damaged by an earthquake, your CEA policy includes a single sublimit of $5,000 to repair or replace all dwelling chimneys.
    Sublimits - Personal Property Coverage

    Personal Property coverage sublimits include the following:

    $1,000 for damage to electronic data-processing equipment such as computers and printers
    $250 for money, bank notes, coins, and medals
    $300 for business property

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.


    Deductibles

    CEA earthquake insurance is intended to protect your assets in the event of catastrophic loss—in order to receive benefits from your CEA earthquake coverage, your claim must exceed set deductibles.

    CEA policy deductibles are a calculation of the share of loss for which a policyholder is responsible—it is not an amount of money a policyholder must have or pay before receiving money from the CEA.
    Deductible for Dwelling Coverage

    If your dwelling sustains eligible earthquake damage in excess of the deductible, you are eligible to a claim payment from the CEA. The deductible amount is used to determine the amount of your claim payment.

    The dwelling deductible is calculated as a percentage of the insured value of the dwelling structure. The insured value is the amount of coverage your insurer has specified as Coverage A: Dwelling in your homeowners insurance policy—this amount can be found on the declarations page of your homeowners insurance policy.

    The CEA policy offers two deductible options: the standard base-limit deductible of 15% or a 10% deductible option.

    A CEA dwelling deductible is either 10% or 15% of the insured value of the dwelling. This table illustrates how to calculate a CEA dwelling deductible, using an insured value of $100,000. (In calculating your deductible, please use your own dwelling's insured value, as stated on your CEA policy's declarations page.)

    Deductible Selected by the Policyholder x Insured Value of Dwelling = Amount of Deductible
    Example 1 15% x $100,000 = $15,000
    Example 2 10% x $100,000 = $10,000

    Only covered damage to the dwelling counts toward meeting the deductible. This means that, regardless of the amount of damage to your home's contents (or "personal property"), structural earthquake damage to your dwelling must exceed the deductible before a CEA policy would be available to pay any loss to the dwelling or any loss to personal property. Certain other conditions may apply to your loss—please read your policy carefully.

    Once structural dwelling damage exceeds the deductible, the CEA will authorize payment for the insured loss, up to the insured value of your dwelling.

    You do not have to pay the deductible before the CEA pays for earthquake damage to your home—the deductible is only used to calculate the payable portion of your claim; you don't have to make actual out-of-pocket expenditures before you receive payments on your CEA claim.
    How Deductibles Are Used to Determine Claim Payments

    (All three Examples assume the policyholder has selected a base-limits deductible of 15%, and the policyholder's dwelling has an insured value of $100,000. The claims below are made only for damage to the dwelling.)
    Amount of Eligible Dwelling Damage – Amount of Deductible = Dwelling Claim Payment
    Example 1 $13,500 – $15,000 = $0

    Damage to the dwelling did not exceed the deductible - the claim is not eligible for payment.
    Example 2 $45,000 – $15,000 = $30,000*
    Example 3 $120,000 – $15,000 = $100,000*

    Eligible for payment, but not more than the insured value of dwelling.
    * Under the CEA base-limits policy, paid dwelling claims are eligible for up to an additional $10,000 for building code upgrades.

    Deductible for Personal Property Coverage

    Damage to personal property is not covered unless the dwelling deductible is met. If the dwelling deductible is met, no additional deductible applies for your Personal Property coverage.
    Deductible for Additional Living Expense/Loss of Use Coverage

    There is no deductible for Additional Living Expense/Loss of Use coverage.

    Eligible Structures

    CEA homeowner policies are intended for individually-owned structures of one to four dwelling units that are used exclusively for residential purposes. The dwelling structure need not be owner-occupied, and only dwelling structures in California are eligible for coverage—buildings used for any commercial, industrial, or business purpose are not eligible for CEA earthquake coverage.

    Structures other than the eligible dwellings described above, including detached garages, outbuildings and other structures, are not eligible for CEA coverage.
    Multiple Structures on One Property

    The CEA will not cover more than one residential structure on one CEA policy. If more than one dwelling is located on a property, the secondary dwellings may be eligible for CEA coverage if written under separate policies—talk to your homeowners insurance agent or company for details.


    Rates & Premiums

    How Rates are Determined

    The CEA is required by law to use the best science available, and is expressly permitted by law to use earthquake computer modeling, to establish actuarially sound rates.
    Identifying Seismic Risk

    To determine seismic risk for an area, scientists and engineers at the computer modeling firm under contract to the CEA incorporate data from a variety of highly respected sources including the United States Geological Survey (USGS) and the California Geological Survey. Criteria used to assess seismic risk for CEA rating territories include location and proximity to earthquake faults, other geological factors that may affect how structures respond to earthquakes, and soil type.
    Computer Modeling

    Computer modeling uses scientific and engineering data and actuarial techniques to calculate anticipated losses from earthquakes. Taking characteristics of the CEA portfolio of earthquake-insurance policies, an earthquake model simulates earthquakes of varying magnitudes, in various locations throughout California. The CEA's policy inventory is the most comprehensive database ever developed for earthquake ratemaking.

    Modeling potential loss scenarios allows the CEA to calculate the claim-paying capacity it must maintain and helps determine appropriate earthquake-insurance rates. The CEA rating methodology is based on the best available scientific, engineering, and actuarial expertise and has been approved and accepted by the CEA Governing Board and the California Department of Insurance.


    Rating Territories

    Based on scientifically modeled seismic risk, the CEA has established actuarially sound “rating territories,” grouping together those ZIP Codes that present reasonably similar seismic risk. Although the risk might not be exactly the same for each ZIP Code in a rating territory, the risks are similar enough to justify the territorial grouping. Policyholders who live in rating territories close to an earthquake fault or have predominantly poor soil can expect higher rates than those on firm soil or farther from faults.
    Age and Type of Construction

    Age and type of construction contribute to how a residential structure reacts during an earthquake. Based on the best available scientific and engineering research, CEA premiums reflect the following rating factors:

    Houses built on a slab perform better than those built on a raised foundation.
    One-story houses are less vulnerable to earthquake shaking than multi-story houses.
    Unreinforced masonry structures are more susceptible to damage than those of wood-frame construction.
    Houses of a certain age are not as strongly constructed as others.

    How CEA Premiums are Calculated
    Rating factors, like the location, age, and type of construction of your home, determine your rate, but the amount and types of CEA coverage you choose determine your premium, the amount you pay each year for your earthquake policy. The factors listed below help to determine your premium.

    Rating territory, determined by the ZIP Code of the insured property
    Insured value (as stated on declarations page of the companion homeowners insurance policy)
    Construction type
    Age of construction
    Number of stories
    Deductible selected (10% or 15%)
    Whether or not optional Increased Building Code coverage (available for policies effective or renewing on or after July 1, 2006) is selected
    Amount of Personal Property coverage selected
    Amount of Additional Living Expense/Loss of Use coverage selected

    Note: Dwellings that have been retrofitted may be entitled to a 5% premium discount.
    Only a CEA participating insurance company or its agent can give you an exact CEA-premium quote, but to get a good estimate of the cost, use our handy premium calculator.
    Retrofit Discount

    The California Insurance Code states that CEA policyholders who have retrofitted their homes to withstand earthquake shake damage according to standards and to the extent set by the CEA Governing Board receive a 5% premium discount.


    The CEA applies a 5% premium discount to dwellings that meet the following requirements: built before 1979, is of a wood-frame construction-type, the frame is tied to the foundation, has cripple walls braced with plywood or its equivalent, and the water heater is secured to the building frame. The retrofit discount is not available for houses built on concrete-slab foundations.




    Mobile home

    The CEA mobile home owners policy is designed to help get you back into your home after an earthquake. The CEA base-limits policy for mobile home owners includes:

    Dwelling coverage - The coverage limit is the insured value of your mobile home stated on your companion homeowner policy.
    Personal Property coverage - $5,000
    Additional Living Expense/Loss of Use coverage - $1,500
    You may select either a 10% or 15% deductible on your Dwelling coverage, and CEA’s increased-limit options allow you to increase Personal Property coverage to as much as $100,000 and Additional Living Expense/Loss of Use coverage to as much as $15,000.

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.


    Coverage

    Dwelling Coverage (Coverage A)

    Dwelling coverage helps protect the investment you have made in your mobile home. It will help pay to repair or, (up to the policy limit) replace, an insured mobile home when structural damage exceeds the policy deductible. You may select a 10% or 15% deductible for your Dwelling coverage.

    The insured value of your mobile home, as stated on the declarations page of your companion homeowners insurance policy, determines the Dwelling-coverage limit of your CEA earthquake policy. If your mobile home's insured value changes in your homeowners policy, the insured value for your earthquake coverage will change, too, and that will affect your earthquake-policy premium.
    Personal Property Coverage (Coverage C)

    Personal Property coverage protects many items in the typical home, including furniture, TVs, audio and video equipment, household appliances, bedding, and clothing.

    A base policy provides up to $5,000 to replace personal property, but you can increase your Personal Property coverage to as much as $100,000.
    Personal Property Coverage: Increased-Limit Options
    Base
    Coverage Option
    1 Option
    2 Option
    3 Option
    4
    $5,000 $25,000 $50,000 $75,000 $100,000

    Additional Living Expense/Loss of Use Coverage (Coverage D)

    If damage from an earthquake prevents you from living in your home, your CEA policy may pay for necessary increases in living expenses you incur to maintain your normal standard of living.
    CEA Additional Living Expense/Loss of Use coverage on a property you own and rent to tenants can help protect your rental income, to the limit of that coverage.
    A base policy provides $1,500 of Additional Living Expense coverage or you can increase that coverage to as much as $15,000.
    Additional Living Expense Coverage: Increased-Limit Options
    Base
    Coverage Option
    1 Option
    2
    $1,500 $10,000 $15,000

    Additional Coverages

    Limited Building Code Upgrade

    In most California communities, repairing or rebuilding a home after an earthquake must be done according to current building codes. In addition to providing funds for repairing or replacing your home, the CEA base policy includes an additional $10,000 in Building Code Upgrade coverage.
    Items Not Covered
    Dwelling-Related Items

    Your CEA policy excludes some items from dwelling coverage. A partial list of items that are not covered includes:

    Detached garages and most other structures that are not part of the dwelling
    Land damage (other than $10,000 in coverage for land stabilization)
    Swimming pools and spas
    Awnings and patio coverings
    Fences, landscaping, and irrigation systems
    Antennas and satellite dishes
    Patios and decks
    Walkways and driveways not needed for pedestrian or disabled access to your home
    Certain decorative or artistic items such as mirrors, chandeliers, stained glass, or mosaics

    Personal Property

    A partial list of personal property items not covered by your CEA policy includes:

    Animals, birds, or fish
    Artwork, photographs, and ceramics
    Motor vehicles (such as cars, trucks, and motorcycles), riding lawn mowers, trailers, golf carts, and watercraft
    Glassware, crystal, porcelain, and china
    Spas and hot tubs

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.
    Coverage Sublimits
    Sublimits - Dwelling Coverage

    Once damage to your dwelling has exceeded your CEA policy’s deductible, the policy covers reasonable emergency repairs in an amount up to 5% of the insured value of the home as part of the dwelling limit of insurance.

    As part of the dwelling limit of insurance, your CEA policy will pay up to $10,000, including engineering costs, to replace, rebuild, stabilize, or otherwise restore land you own that is necessary to support your home. The policy does not provide any other coverage for land.
    Sublimits - Personal Property Coverage

    Personal Property coverage sublimits include the following:

    $1,000 for damage to electronic data-processing equipment such as computers and printers
    $250 for money, bank notes, coins, and medals
    $300 for business property

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.



    Deductibles

    CEA earthquake insurance is intended to protect your assets in the event of catastrophic loss—in order to receive benefits from your CEA earthquake coverage, your claim must exceed set deductibles.

    CEA policy deductibles are a calculation of the share of loss for which a policyholder is responsible—it is not an amount of money a policyholder must have or pay before receiving money from the CEA.
    Deductible for Dwelling Coverage

    If your dwelling sustains eligible earthquake damage in excess of the deductible, you are eligible to a claim payment from the CEA. The deductible amount is used to determine the amount of your claim payment.

    The dwelling deductible is calculated as a percentage of the insured value of the dwelling structure. The insured value is the amount of coverage your insurer has specified as Coverage A: Dwelling in your homeowners insurance policy—this amount can be found on the declarations page of your homeowners insurance policy.

    The CEA policy offers two deductible options: the standard base-limit deductible of 15% or a 10% deductible option.

    A CEA dwelling deductible is either 10% or 15% of the insured value of the dwelling. This table illustrates how to calculate a CEA dwelling deductible, using an insured value of $100,000. (In calculating your deductible, please use your own dwelling's insured value, as stated on your CEA policy's declarations page.)

    Deductible Selected by the Policyholder x Insured Value of Dwelling = Amount of Deductible
    Example 1 15% x $100,000 = $15,000
    Example 2 10% x $100,000 = $10,000

    Only covered damage to the dwelling counts toward meeting the deductible. This means that, regardless of the amount of damage to your home's contents (or "personal property"), structural earthquake damage to your dwelling must exceed the deductible before a CEA policy would be available to pay any loss to the dwelling or any loss to personal property. Certain other conditions may apply to your loss—please read your policy carefully.

    Once structural dwelling damage exceeds the deductible, the CEA will authorize payment for the insured loss, up to the insured value of your dwelling.

    You do not have to pay the deductible before the CEA pays for earthquake damage to your home—the deductible is only used to calculate the payable portion of your claim; you don't have to make actual out-of-pocket expenditures before you receive payments on your CEA claim.
    How Deductibles Are Used to Determine Claim Payments

    (All three Examples assume the policyholder has selected a base-limits deductible of 15%, and the policyholder's dwelling has an insured value of $100,000. The claims below are made only for damage to the dwelling.)
    Amount of Eligible Dwelling Damage – Amount of Deductible = Dwelling Claim Payment
    Example 1 $13,500 – $15,000 = $0

    Damage to the dwelling did not exceed the deductible - the claim is not eligible for payment.
    Example 2 $45,000 – $15,000 = $30,000*
    Example 3 $120,000 – $15,000 = $100,000*

    Eligible for payment, but not more than the insured value of dwelling.
    * Under the CEA base-limits policy, paid dwelling claims are eligible for up to an additional $10,000 for building code upgrades.

    Deductible for Personal Property Coverage

    Damage to personal property is not covered unless the dwelling deductible is met. If the dwelling deductible is met, no additional deductible applies for your Personal Property coverage.
    Deductible for Additional Living Expense/Loss of Use Coverage

    There is no deductible for Additional Living Expense/Loss of Use coverage.



    Rates & Premiums

    How Rates are Determined

    The CEA is required by law to use the best science available, and is expressly permitted by law to use earthquake computer modeling, to establish actuarially sound rates.
    Identifying Seismic Risk

    To determine seismic risk for an area, scientists and engineers at the computer modeling firm under contract to the CEA incorporate data from a variety of highly respected sources including the United States Geological Survey (USGS) and the California Geological Survey. Criteria used to assess seismic risk for CEA rating territories include location and proximity to earthquake faults, other geological factors that may affect how structures respond to earthquakes, and soil type.
    Computer Modeling

    Computer modeling uses scientific and engineering data and actuarial techniques to calculate anticipated losses from earthquakes. Taking characteristics of the CEA portfolio of earthquake-insurance policies, an earthquake model simulates earthquakes of varying magnitudes, in various locations throughout California. The CEA's policy inventory is the most comprehensive database ever developed for earthquake ratemaking.

    Modeling potential loss scenarios allows the CEA to calculate the claim-paying capacity it must maintain and helps determine appropriate earthquake-insurance rates. The CEA rating methodology is based on the best available scientific, engineering, and actuarial expertise and has been approved and accepted by the CEA Governing Board and the California Department of Insurance.
    Rating Territories

    Based on scientifically modeled seismic risk, the CEA has established actuarially sound “rating territories,” grouping together those ZIP Codes that present reasonably similar seismic risk. Although the risk might not be exactly the same for each ZIP Code in a rating territory, the risks are similar enough to justify the territorial grouping. Policyholders who live in rating territories close to an earthquake fault or have predominantly poor soil can expect higher rates than those on firm soil or farther from faults.


    How CEA Premiums are Calculated
    Rating factors, like the location of your residence, determine your rate, but the amount and types of CEA coverage you choose determine your premium, the amount you pay each year for your earthquake policy. The factors listed below help to determine your premium.

    Rating territory, determined by the ZIP Code of the insured mobile home's location
    Insured value (as stated on declarations page of the companion homeowners insurance policy)
    Deductible selected (10% or 15%)
    Amount of Personal Property coverage selected
    Amount of Additional Living Expense/Loss of Use coverage selected
    Note: Mobile homes that have been retrofitted may be entitled to a 5% premium discount.

    Only a CEA participating insurance company or its agent can give you an exact CEA-premium quote, but to get a good estimate of the cost, use our handy premium calculator.
    What Is a Modular Home versus a Mobile home or Manufactured Home?

    Though built in sections at a factory, modular homes are built to conform to all building codes at their destinations. They are generally placed on a foundation, then joined and completed by a local builder.

    Mobile homes (or manufactured homes) are built to quality-assurance standards administered by the U.S. Department of Housing and Urban Development, rather than to building codes at their destinations. Mobile homes are usually built on a non-removable steel chassis. Building inspectors check the work done locally (such as electrical hook-up) but are not required to approve the structure.

    The CEA rates modular homes in the same manner as site-built homes. CEA participating insurance companies may rate a mobile home as a dwelling if the mobile home is permanently attached to a foundation so that property taxes are assessed.


    Retrofit Discount

    The California Insurance Code states that CEA policyholders who have retrofitted their homes to withstand earthquake shake damage according to standards and to the extent set by the CEA Governing Board receive a premium discount.

    The CEA applies a premium discount to mobile home policies if the mobile home is reinforced by an earthquake-resistant bracing system that is certified by the California Department of Housing and Community Development.

    The statewide average premium discount is 55%, however the exact discount amount varies by residence location.


    Condominium

    The CEA condominium-owner policy (for individual condominiums, townhouses, or other common-interest-development properties) is designed to help get you back into your home after an earthquake. When you buy a CEA base-limits condominium policy, you have the choice of three coverage options which may be purchased separately or in combination. The following are the coverage and limit options available:

    Building Property - $25,000
    Personal Property - $5,000; Additional Living Expense/Loss of Use - $1,500
    Loss Assessment - $25,000, $50,000 or $75,000
    CEA’s increased-limit options allow you to increase Personal Property coverage to as much as $100,000 and Additional Living Expense/Loss of Use coverage to as much as $15,000.

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.



    Coverage

    Building Property Coverage (Coverage A)

    When damage exceeds the policy’s Building Property coverage deductible of $3,750, this coverage provides up to $25,000 to repair and replace certain interior elements and improvements and would also cover utility equipment such as pipes and wiring for which you alone are responsible under your homeowners association's governing documents.

    The coverage does not pay to repair or replace parts of the condominium development that are commonly-owned or are otherwise the responsibility of your homeowners association.

    Examples of covered interior elements and improvements are built-in appliances, fixtures, and wall-to-wall carpeting.

    When you purchase earthquake insurance for your condominium, you should confirm which utility and similar equipment are your legal responsibility to repair and maintain.
    Personal Property Coverage (Coverage C)

    Personal Property coverage protects many items in the typical home including such items as furniture, TVs, audio and video equipment, household appliances, bedding, and clothing.

    If you choose Personal Property coverage, base coverage provides up to $5,000 to replace personal property, but you can increase your coverage up to as much as $100,000. By choosing to include Personal Property coverage in your policy, you will automatically receive Additional Living Expense/Loss of Use coverage of $1,500.
    Personal Property Coverage: Increased-Limit Options
    Base
    Coverage Option
    1 Option
    2 Option
    3 Option
    4
    $5,000 $25,000 $50,000 $75,000 $100,000

    Additional Living Expense/Loss of Use Coverage (Coverage D)

    If damage from an earthquake prevents you from living in your home, your CEA policy may pay for necessary increases in living expenses you incur to maintain your normal standard of living.
    CEA Additional Living Expense/Loss of Use coverage on a property you own and rent to tenants can help protect your rental income, to the limit of that coverage.
    You can purchase a base limit of $1,500 of Additional Living Expense coverage or increase that coverage to as much as $15,000. If you choose to include Additional Living Expense coverage as part of your policy, you will automatically receive base Personal Property coverage of $5,000 as well.
    Additional Living Expense Coverage: Increased-Limit Options
    Base
    Coverage Option
    1 Option
    2
    $1,500 $10,000 $15,000

    Loss Assessment Coverage (Coverage E)

    In condominium communities, building exteriors, certain building components, and common areas are typically owned by the homeowners association or by all of the condominium owners as a group. In the event of earthquake damage to such property, the association, in accordance with its governing documents, may impose an assessment against members of the association to pay for repairs. Loss Assessment coverage will help you pay your share of certain assessments the association may impose.

    If the fair market value of your condominium is greater than $135,000, you can purchase $50,000 or $75,000 in Loss Assessment coverage; if the fair market value is $135,000 or less, you can choose to purchase either $25,000, $50,000 or $75,000 in coverage.
    Additional Coverage

    Limited Building Code Upgrade Coverage

    In most California communities, repairing or rebuilding a home after an earthquake must be done according to current building codes. In addition to the $25,000 Building Property coverage limits, the Building Property coverage provides an additional $10,000 in coverage for the cost of making upgrades required by current building codes.
    Items Not Covered
    Building Property and Loss Assessment

    Your policy excludes some items from your Building Property and Loss Assessment coverage. A partial list of items that are not covered includes:

    Detached garages and most other structures that are not part of the commonly-owned dwelling structures
    Land damage (other than $10,000 in coverage for land stabilization)
    Swimming pools and spas
    Awnings and patio coverings
    Fences, landscaping, and irrigation systems
    Antennas and satellite dishes
    Decorative features

    Personal Property

    A partial list of personal property items not covered by your CEA policy includes:

    Animals, birds, or fish
    Artwork, photographs, and ceramics
    Motor vehicles (such as cars, trucks, and motorcycles), riding lawn mowers, trailers, golf carts, and watercraft
    Glassware, crystal, porcelain, and china
    Spas and hot tubs

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.
    Coverage Sublimits
    Sublimits - Personal Property Coverage

    Personal Property coverage sublimits include the following:

    $1,000 for damage to electronic data-processing equipment such as computers and printers
    $250 for money, bank notes, coins, and medals
    $300 for business property

    Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.

    Deductibles

    CEA earthquake insurance is intended to protect your assets in the event of catastrophic loss—in order to receive benefits from your CEA earthquake coverage, your claim must exceed set deductibles.

    CEA policy deductibles are a calculation of the share of loss for which a policyholder is responsible—it is not an amount of money a policyholder must have or pay before receiving money from the CEA.
    Deductible for Building Property Coverage

    Building Property coverage provides up to $25,000 to repair or replace interior structural components when damage exceeds the policy’s $3,750 (15%) deductible.
    Deductible for Personal Property Coverage

    The deductible is $750, no matter what limit of Personal Property coverage you select.
    Deductible for Additional Living Expense/Loss of Use Coverage

    There is no deductible for Additional Living Expense/Loss of Use coverage.
    Deductible for Loss Assessment Coverage

    Loss Assessment coverage has a deductible of 15% of the total Loss Assessment coverage amount.

    Rates & Premiums

    How Rates are Determined

    The CEA is required by law to use the best science available, and is expressly permitted by law to use earthquake computer modeling, to establish actuarially sound rates.
    Identifying Seismic Risk

    To determine seismic risk for an area, scientists and engineers at the computer modeling firm under contract to the CEA incorporate data from a variety of highly respected sources including the United States Geological Survey (USGS) and the California Geological Survey. Criteria used to assess seismic risk for CEA rating territories include location and proximity to earthquake faults, other geological factors that may affect how structures respond to earthquakes, and soil type.
    Computer Modeling

    Computer modeling uses scientific and engineering data and actuarial techniques to calculate anticipated losses from earthquakes. Taking characteristics of the CEA portfolio of earthquake-insurance policies, an earthquake model simulates earthquakes of varying magnitudes, in various locations throughout California. The CEA's policy inventory is the most comprehensive database ever developed for earthquake ratemaking.

    Modeling potential loss scenarios allows the CEA to calculate the claim-paying capacity it must maintain and helps determine appropriate earthquake-insurance rates. The CEA rating methodology is based on the best available scientific, engineering, and actuarial expertise and has been approved and accepted by the CEA Governing Board and the California Department of Insurance.
    Rating Territories

    Based on scientifically modeled seismic risk, the CEA has established actuarially sound “rating territories,” grouping together those ZIP Codes that present reasonably similar seismic risk. Although the risk might not be exactly the same for each ZIP Code in a rating territory, the risks are similar enough to justify the territorial grouping. Policyholders who live in rating territories close to an earthquake fault or have predominantly poor soil can expect higher rates than those on firm soil or farther from faults.


    How CEA Premiums are Calculated
    Rating factors, like the location of your residence, determine your rate, but the amount and types of CEA coverage you choose determine your premium, the amount you pay each year for your earthquake policy. The factors listed below help to determine your premium.

    Rating territory, determined by the ZIP Code of the insured property
    Fair market value of the individual unit
    Whether or not an HOA master policy of earthquake insurance exists
    Whether or not Building Property coverage is selected
    Amount of Personal Property coverage selected
    Amount of Additional Living Expense/Loss of Use coverage selected
    Amount of Loss Assessment coverage available or selected

    Only a CEA participating insurance company or its agent can give you an exact CEA-premium quote, but to get a good estimate of the cost, use our handy premium calculator.
    Has Your Homeowners Association Purchased a Master Policy for Earthquake?

    A master policy of earthquake insurance, purchased by a condominium owner’s homeowners association (HOA), may provide condominium owners with a significant layer of protection from earthquake damage and loss. (Such policies are considered commercial policies and are not available through the CEA.) It is important for you to know if your HOA has a master policy of earthquake insurance in place and, if it does, to become familiar with its scope of coverage, exclusions, and deductibles.

    If your condominium development suffers earthquake damage but your HOA has no earthquake coverage, individual condominium owners might have to pay assessments levied by the HOA to repair or rebuild condominium structures. If an HOA master earthquake policy is in place, it still may have deductibles for which owners of individual units can be assessed. But because of the protection a master policy provides, your CEA earthquake-insurance premium will be lower if you provide documentation that your HOA has a master policy of earthquake insurance in force.
    Retrofit Discount

    Condominium owners and renters are not eligible for the CEA retrofit discount.





    Does My Homeowners Policy Cover Earthquakes?

    Most standard homeowners, mobile home owners, condominium, and renters insurance policies do not cover earthquake damage. Similar to flood insurance, earthquake insurance usually must be purchased separately.
    Is My Residential Property Insurance Company Required to Offer Earthquake Insurance?

    The law requires insurers that sell residential property insurance in California to offer earthquake coverage to their policyholders. Residential property insurance includes coverage for homeowners, condominium owners, mobile home owners, and renters. In offering earthquake coverage, insurance companies can become a CEA participating insurance company and offer the CEA’s residential earthquake policies or they can manage the risk themselves. To date, companies that sell over two-thirds of the residential property insurance in the state have opted to become CEA participating companies.


    Do I Need Earthquake Insurance?

    Many people assume their residential insurance policy fully protects them, but if you look at a typical policy, you will see it does not cover earthquake loss. And government disaster-relief programs are extremely limited—they are designed to help you get partly back on your feet, but not to replace your home and everything you lose. So if an earthquake strikes tomorrow, will you have the financial resources to pay for earthquake damage to your home and its contents?

    When you consider your resources, ask yourself how much of your investment in your home you are willing to put at risk. For many California homeowners, their home is their biggest financial asset. Without earthquake insurance, how do you plan to protect that asset from the costs of earthquake damage? If you have a typical home loan and deed of trust, did you know you remain responsible for the loan balance even if your home is damaged or destroyed by an earthquake?

    Consider taking these basic steps as part of good planning and preparation: Research the earthquake hazard in your area. Secure the contents of your home to reduce the likelihood of damage and injury. Investigate how well your dwelling is designed and constructed to resist damage from earthquake motion—retrofit the structure if necessary. Analyze your finances and develop a financial-recovery plan in case an earthquake damages or destroys your home or its contents.

    There is good information available to help you. But only you can decide if earthquake insurance is right for you.


    What is Meant by a “Mini-policy”?

    In 1996, by act of the California Legislature, a reduced-coverage, catastrophic earthquake-insurance policy became available. This so-called earthquake "mini-policy" is intended to protect a policyholder’s dwelling—to provide a "roof over your head"—while excluding coverage for costly non-essential items such as swimming pools, patios, and detached structures. The base CEA policy is based on and authorized under the mini-policy law. Such policies are intended to help the policyholder avoid catastrophic loss while keeping premiums more affordable for more consumers.
    What Are My Earthquake Risks?

    No part of California is "immune" from earthquakes—in other words, there is no “low-risk” area in California for Earthquakes—there are only areas of lower or higher risk.

    In general terms, your home’s risk level depends on where you live in relation to earthquake faults, the age and type of dwelling you live in, and the soil types where you live.

    Some parts of California that have not experienced earthquakes for 200 years or more might be more susceptible to earthquakes than areas that have experienced recent earthquakes. Why? Earthquake faults build up tension over long periods of time; what we experience as an earthquake occurs when that tension is suddenly released. It is theorized that relatively recent earthquake activity means that faults have released built-up tension—a lack of earthquake activity can mean that tension is still building and could be released at any time as an earthquake.
    How Much Earthquake Insurance Should I Have?

    Like the basic question of whether earthquake insurance is right for you, how much coverage is right for you depends on your individual circumstances. The following questions may help you decide:

    Can you afford to replace your household possessions (such as sofas, beds, TVs, furniture, refrigerators, and clothing) if they were destroyed in an earthquake? How much would they cost?
    If you have to find temporary accommodations because you cannot live in your home as the result of an earthquake, how much will you need to pay for those additional living expenses?
    If you own your home, how much home equity do you have? Can you afford to risk losing that equity if an earthquake damages or destroys the home?
    How much would it cost to rebuild your home? Do you have assets available to repair or even rebuild your home after an earthquake?
    Do you have a mortgage, second mortgage, or line of credit on your home? Can you afford to continue repaying those loans while also paying to rebuild or replace your home?
    Keep in mind that the insured value of your dwelling for your earthquake policy is the same as the amount of coverage specified in your homeowners insurance policy. If you are underinsured on your homeowners policy, you are underinsured on your earthquake policy, too.

    Won’t the Government Be There to Help Me?

    The federal Department of Homeland Security’s Federal Emergency Management Agency (FEMA) and the Governor’s Office of Emergency Services (OES) in California respond to, plan for, and help mitigate effects of disasters. Government disaster-relief programs are designed to help you get partly back on your feet but not to replace your home and everything you lose.

    The primary form of federal disaster relief is the low-interest loan—as a loan, it must be repaid. Because it is a loan that must be repaid, some people do not qualify for the loan. FEMA grants for post-disaster emergency home repairs and temporary rent assistance are only available to individuals and households who do not qualify for loans.

    In addition to creating a plan to take care of your family for immediately after an earthquake, you should also develop a family plan for long-term financial recovery.
    How Can I Purchase CEA Earthquake Insurance?
    CEA earthquake insurance policies are sold only through CEA participating insurance companies. You can buy CEA coverage only through the insurance company that provides your residential property insurance and only if that company is a CEA participating insurance company. Participating insurance companies process all CEA policy applications, policy renewals, invoices, and payments and handle all CEA claims.
    To establish a new CEA policy, to make changes to an existing CEA policy, to ask questions about your CEA coverage, or to request a copy of your CEA policy, please contact your insurance agent or participating insurance company. To obtain CEA coverage, you must first have a companion residential insurance policy written through a CEA participating insurance company.

     

     

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