We've gathered some frequently asked questions to help you understand how a CEA policy can help your policyholder recover from the next damaging earthquake.
Q: Does CEA offer stand-alone policies?A. No. However, since a CEA policy must be with the same participating residential insurance company that the standard residential (fire) policy is with, you can expand your business by explaining to your customer why adding a CEA earthquake insurance policy is beneficial for their financial recovery.
If you’re an independent agent, remember that mixing and matching carriers is not allowed—the residential policy and the CEA policy must both be under the same carrier.
Q: How can I help my customer be better prepared for an earthquake?A. Government assistance, if available, is limited. The maximum FEMA grant available in 2018 is just $34,000. The average FEMA payout after the 2014 South Napa earthquake was just $2,670. The goal of a grant is not to return a home to its pre-disaster condition. And while loans for rebuilding houses or replacing personal property are sometimes offered, they must be paid back with interest, just like a mortgage.
Q: My client tells me they can't afford earthquake insurance. What can I tell them?A. Since 1996, construction costs have increased over 140%, yet CEA has lowered its rates by a combined 55%. In addition, starting in 2016, CEA began offering expanded coverage choices and more deductible options. With these more flexible policies, it’s easier for you to help your client choose a CEA policy that fits their needs and budget. If they’re a homeowner, make sure they know about Homeowners Choice, which lets them cover just the dwelling itself, or have separate deductibles for dwelling and personal property.
Q: My client wants different billing options. What should I tell them?A. The participating residential insurer who you work for is responsible for deciding what payment methods and schedules they want to offer your clients. Make sure you’re aware of all payment methods and installments your company offers, and work to find the best option for your clients’ needs.
Q: My client's home survived the last earthquake, why should I offer them earthquake insurance?A. Since every earthquake is different, a home that was spared in one earthquake can be badly damaged or completely destroyed by the next.
Q: Why should I offer earthquake insurance to my residential insurance customers?A. In California, a residential insurance policy doesn’t cover earthquake damage. A CEA policy can:
A. Agents who sell California Earthquake Authority (CEA) policies are agents of CEA participating insurers, and not agents of CEA. CEA policies are sold and serviced in their entirety by our participating insurers, so they would be the ones to provide any necessary agent documents. Please contact the participating insurer you work for to obtain any such items.
Q: What is CEA doing regarding late payments or other CEA policy issues during the COVID-19 pandemic?
A. CEA policy billing, payments, changes and renewals are not handled by CEA. The servicing of an insured's policy—including any accommodations due to the COVID pandemic—is handled by the residential property insurance company that issued their CEA policy. You will need to contact the insurance company through which your customer's CEA policy was issued for details on how they are managing grace periods, late payments, or other policy issues that may arise related to COVID-19.
Read the California Insurance Commissioner's latest bulletin on grace periods for more information.