Q: The 1994 Northridge Earthquake caused about $20 billion in residential damage, but CEA has about $20 billion in claim-paying capacity. How can you cover all the claims after a major earthquake? (FAQ)
A. CEA would have liability only for a defined portion of the total cost of the economic damage caused by a major California earthquake, because CEA assets are available only to pay claims of homeowners and renters who have protected their homes and possessions by buying a CEA earthquake insurance policy. Put another way, like any insuring entity, CEA is responsible for paying its insured losses…
Q: Can CEA file for bankruptcy protection? (FAQ)
A. No. CEA is not permitted to file for bankruptcy protection, and, unlike a private insurer, it cannot be taken over by the state insurance commissioner. If an earthquake causes insured damage greater than the CEA's claim-paying capacity, policyholders with earthquake damage may be paid a prorated portion of their covered losses. Or, the CEA Governing Board CEA Governing Board may approve…
Q: Is CEA financially sound? (FAQ)
A. Yes. CEA has an B++ (Good) rating from A.M. Best Rating Services A.M. Best Co. , the world's leading rating agency of insurance companies.
Q: Why have my policy options changed? (FAQ)
A. CEA works hard to keep rates low and offer a range of insurance policy options. When a damaging earthquake strikes, we want to help you get back on your feet—to rebuild and/or repair your earthquake-damaged home. CEA is a not-for-profit entity which does not receive any state or federal financial backing to pay claims after an earthquake. Additionally, as the cost of home construction and repairs is increasing in California,…
Q: Won’t my landlord’s policy cover my belongings? (FAQ)
A. Generally not. You’ll first need a separate renters policy, and then a CEA earthquake insurance policy , to cover damage to your personal belongings such as TVs and furniture, and to cover loss of use in case earthquake damage keeps you out of your home.
Q: Do I need to retrofit my house before I can buy a CEA policy? (FAQ)
A. You do not need to retrofit your house to before buying a CEA policy. However, depending on the year your house was built, a retrofit can make it stronger and more resistant to earthquake damage, and qualify you for a Premium Discounts on Earthquake Insurance CEA premium discount .
Q: What training is required to handle a CEA earthquake claim? (FAQ)
A. Claim adjusters responsible for earthquake claims in California, including CEA earthquake claims, must be properly certified and accredited before handling any residential earthquake insurance claim in the state. To handle a CEA earthquake claim, you must complete these CEA and California Department of Insurance (CDI) training requirements before beginning the adjustment of the claim: California Fair Claims…
Q: Do I need to retrofit my mobilehome before I can buy a CEA policy? (FAQ)
A. You do not need to retrofit your mobilehome before buying a CEA policy. However, a retrofit can make it stronger and more resistant to earthquake damage, and qualify you for a CEA offers earthquake insurance premium discounts for older houses that have been retrofitted to better withstand earthquakes discount .
Q: Has the CEA paid out claims? If so, when and how quickly were claims settled? (FAQ)
A. Yes, CEA has issued payments for claims from past earthquake events. Just as our participating insurers (PIs) handle the sale and servicing of all CEA policies, our PIs also handle earthquake damage claims. All investigations and settlement of claims are handled by our PIs on CEA’s behalf.
Q: When does this take effect? (FAQ)
A. These changes will likely not take effect until late-2023, so you will see the impact at your policy renewal date. We will proactively communicate these changes to stakeholders (including our policyholders, participating insurers and agents). We encourage you to talk to your agent now to see how the coverage changes may affect you.