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California Earthquake Authority – CEA

The California Earthquake Authority is an organization in California that offers earthquake insurance that covers your home or condominium in the event of earthquake damage. Below are some important facts about earthquake insurance policies.

CEA

  • Standard homeowners insurance policies don’t cover damage caused by earthquakes.
  • California insurance companies that provide residential property insurance are required by law to offer earthquake insurance.
  • If you live in an area prone to earthquakes, you need earthquake insurance. Your residential insurance policy probably won’t protect you, and the government’s disaster relief programs have only limited resources.

Follow these steps to assess you risk and decide whether you need coverage:

  • Research the likelihood of earthquakes in your area.
  • Make sure the contents of your home are secured to reduce the risk of injury and damage.
  • Analyze the design of your home to determine how resistant it will be to earthquake.
  • Look at your finances to determine whether you would be able to pay for earthquake damage repairs.

About Mini-Policies

  • In 1996, the California Legislature created a reduced coverage policy to cover homeowners in the event of catastrophic earthquakes.
  • This policy covers only essential structures. It will not cover detached structures, patios or swimming pools.
  • Mini policies cost less than standard earthquake insurance policies.

Are You at Risk for Earthquakes?

  • All areas of California are at risk for earthquakes.
  • Though some areas have higher risks than others, no area of California is free from risk.
  • Your home’s level of risk depends on the type of soil in your area, the age of your home and its location relative to earthquake faults.

Understanding CEA Insurance Products

  • After an earthquake, CEA insurance products aren’t restricted.
  • You must have a residential property policy from a CEA provide before you can purchase earthquake insurance.
  • Earthquakes occurring before your policy’s effective date won’t be covered.
  • Insurance coverage amounts vary. You should purchase enough coverage to replace or rebuild your home and replace your most valuable possessions.

About Government Assistance

  • Government disaster relief will not replace your home or your possessions.
  • The main form of relief offered is a low-interest loan that you must repay.
  • Not everyone will qualify for the loan. FEMA grants may be available for those who don’t qualify.

About Loss Assessments

  • When condominiums are struck by earthquakes, all members of the condo association may be required to pay for structural repairs.
  • Loss assessment determines the amount each property owner must pay.
  • Because more condominium associations are purchasing policies with higher deductibles, loss assessments are becoming more common.