If you live in California, you’re no stranger to earthquakes. The state experiences countless earthquakes every year, with some causing significant damage to homes and businesses. To protect yourself and your property, it’s important to consider earthquake insurance. One of the most popular options in California is the California Earthquake Authority (CEA) earthquake insurance. In this article, we’ll provide an in-depth guide to understanding CEA earthquake insurance and how it can benefit you.
What is the California Earthquake Authority?
The California Earthquake Authority was formed in 1996 as a not-for-profit organization to provide earthquake insurance to California residents. It’s the largest provider of earthquake insurance in the state and works with a network of insurance companies to offer coverage to homeowners, renters, and condominium owners.
The CEA is regulated by the California Department of Insurance and governed by a board of directors made up of appointed insurance industry professionals and elected officials. The organization is funded by policyholders’ premiums, and its main goal is to provide affordable earthquake insurance to all California residents.
What Does CEA Earthquake Insurance Cover?
CEA earthquake insurance covers damage to your home and belongings caused by earthquakes. This includes:
What’s Covered |
What’s Not Covered |
Damage to your home and attached structures (such as garages) |
Flood or water damage |
Damage to your personal belongings |
Landscaping or outdoor property, such as pools |
Additional living expenses if you’re unable to live in your home due to earthquake damage |
Mold, fungi, or wet or dry rot |
Emergency repairs to prevent further damage |
Damage to vehicles or items outside your home |
It’s important to note that CEA earthquake insurance doesn’t cover damage caused by fire, unless it’s a result of an earthquake.
How Does CEA Earthquake Insurance Work?
To purchase CEA earthquake insurance, you must first have a homeowner’s insurance policy. You’ll then need to work with your insurance company to add earthquake coverage to your policy. Your insurance company will provide you with a CEA earthquake insurance policy, which is separate from your homeowner’s insurance policy.
The cost of CEA earthquake insurance varies depending on a number of factors, including the age and value of your home, the location of your home, and the deductible you choose. Deductibles typically range from 5% to 25% of the coverage limits you choose. The higher your deductible, the lower your premium will be.
CEA earthquake insurance policies have limits on the amount of coverage they provide. The maximum coverage limit for a single-family home is $5 million. Your coverage limit will depend on the value of your home and the amount of coverage you choose.
Is CEA Earthquake Insurance Worth It?
Whether or not CEA earthquake insurance is worth it for you depends on a number of factors, including:
- The likelihood of earthquakes in your area
- The age and value of your home
- Your financial situation
If you live in a high-risk earthquake area, have a newer or more valuable home, or would struggle to pay for earthquake damage without insurance, CEA earthquake insurance may be worth it for you. However, if you have an older or less valuable home, live in a low-risk area, or have the financial means to cover earthquake damage without insurance, you may not need earthquake insurance.
FAQ
What’s the difference between earthquake insurance and homeowner’s insurance?
While homeowner’s insurance covers damage to your home caused by a number of perils, such as fire, theft, and water damage, it typically doesn’t cover earthquake
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