The California Earthquake Authority (CEA) has rolled out new options to help make earthquake insurance more affordable and convenient for state residents.
The Sacramento-based CEA is a not-for-profit earthquake insurance provider and writes 75% of the residential earthquake-insurance policies in California.
"Many Californians have mixed feelings about earthquake insurance — scientists tell them there's earthquake risk, but they are concerned that coverage may be too expensive or come with a deductible that's too high," said Glenn Pomeroy, the authority's CEO. "Now is the time to take another look, because with lower rates and more options, Californians can choose a policy to meet their needs and budget — it is no longer a 'one size fits all' proposition."
Most CEA policyholders will receive lower rates in 2016 — compliments of CEA's 10% statewide-average-rate reduction. Other enhancements include:
- New deductible options ranging from 5% to 25%.
- Doubled personal property coverage is available, up to $200,000.
- Quadrupled loss of use coverage (additional living expenses), up to $100,000.
- Increased mitigation discount for eligible homeowners, up to 20% of premium.
The CEA also unveiled a new online premium calculator.
"Consumers now can click on our premium calculator, look at the options, and find the earthquake insurance policy that makes sense for them," Pomeroy said.
Costs are based on proximity to a fault and the age of the home. Homes built before the 1940s are especially vulnerable, but homeowners who fortify their foundations can minimize potential damage and can also be eligible for a discount on their insurance.
According to the U.S. Geological Survey, the likelihood of a 6.7-magnitude or larger earthquake in California (the same magnitude as the 1994 Northridge earthquake) is a virtual certainty (over 99%) in the next 30 years, which is the duration of a typical home mortgage. Still, fewer than 10% of California homes are covered by earthquake insurance, the CEA said.
"We tend to forget they happen. They can be devastating and it's going to happen again," Pomeroy told the KABC television station in Los Angeles.
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