NU Online News Service, July 5, 10:58 a.m.EDT

Getting more people to buy earthquake insurance coverage is achallenge and the California Earthquake Authority says it hasdeveloped a new product line that attempts to do that.

With what the CEA is calling a “Homeowners Choice” product,residents will have a choice to select or decline coverage ofpersonal property, which the CEA says will be more accessiblethrough a new deductible structure.

“With just 10 percent of Californians currently buyingearthquake-insurance coverage, this new product is an importantstep toward helping more people protect their homes and personalfinances from the devastating disruption of a major earthquake,”says Glenn Pomeroy, chief executive officer of the state-run CEA,in a statement.

This new product line coupled with the CEA's existing policy forearthquake coverage—which bundles dwelling, personal property andadditional living expenses coverage—should allow policyholders tobetter meet their insurance and budgetary needs, the CEA says.

Standard homeowners, renters and business insurance policies donot cover damage from earthquakes. Coverage can traditionally beobtained with an endorsement or separate policy.

Although California is home to about 70 percent of the country'searthquake risk, penetration of earthquake insurance is low. Thelow frequency of earthquakes seems to play a role in a homeowners'purchase of insurance. The current 10 percent of Californiahomeowners with earthquake coverage is down from more than 30percent in 1996—two years after the Northridge earthquake, whichcaused more than $22 billion in insured losses in today'sdollars.

The CEA is, by far, the top provider of earthquake insurance inthe U.S., with a market share of 28.5 percent. State Farm is thenext-highest writer, with a market share of 11 percent, accordingto SNL Financial.