Some questions about purchasing earthquake insurance in CA

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jdouge
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Some questions about purchasing earthquake insurance in CA

Post by jdouge » Wed Jun 13, 2018 12:49 am

I purchased, through my home insurance agent, earthquake insurance through GeoVera three years ago.

Unlike the CEA offers, they have a "single limit" model. I am insured for house, personal property, loss of use, code updates up to $459k. I pay $900/year for the policy.

Last year, I changed home insurance providers. The one I was leaving sent me a CEA policy with minimal coverage for exactly what the CEA calculator gives for those terms.

I also received a quote from my new home insurance provider with the exact same terms for $566.

I am revisiting those quotes now. I had thought that the GeoVera quote was large because it covers the dwelling plus loss of use and personal property. But the policy, now that I read it, says that "the single limit is based on the replacement value of the home". The deductible on this policy is enormous because of the high single limit: 15% is a $68k deductible.

But the replacement cost of the dwelling was valued by both insurance companies at about $225k. GeoVera, for some reason, is more than 100% off.

So I certainly need to dump the GeoVera policy (or adjust the single limit to something actually approximating the replacement cost of my house).

My question is: if all earthquake insurance goes through the CEA, why did I get $341 and $566 quotes for the same level of coverage? Are home insurance companies allowed to charge over the CEA numbers? I am particularly concerned because the latter, higher cost is what my new insurance company quoted to me last summer. If I call tomorrow and they are well over the CEA calculator's cost for the coverage I want, what are my options?

I also think GeoVera does NOT go through the CEA. So I could turn back to them, I suppose. But their method of arriving at a single limit is rather opaque. Is it possible that earthquake insurance can be offered in CA outside the CEA framework? Many BHs on many threads I read tonight about this issue claim that all earthquake insurance must go through the CEA. But GeoVera clearly doesn't follow the CEA method.

If anybody has answers to the questions in bold above, thanks! Other comments welcome as well.

mervinj7
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Re: Some questions about purchasing earthquake insurance in CA

Post by mervinj7 » Wed Jun 13, 2018 11:17 am

I don't have the answers to your specific questions but you can get your CEA estimated quote here:
https://www.earthquakeauthority.com/Cal ... Calculator

As far as I understand, all insurance providers should give you the same quote. Also, depending on your zip code, you may qualify for $3k rebate for seismic retrofitting.
https://www.earthquakebracebolt.com/Hom ... gistration

talzara
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Re: Some questions about purchasing earthquake insurance in CA

Post by talzara » Wed Jun 13, 2018 1:16 pm

jdouge wrote:
Wed Jun 13, 2018 12:49 am
I also think GeoVera does NOT go through the CEA. So I could turn back to them, I suppose. But their method of arriving at a single limit is rather opaque. Is it possible that earthquake insurance can be offered in CA outside the CEA framework? Many BHs on many threads I read tonight about this issue claim that all earthquake insurance must go through the CEA. But GeoVera clearly doesn't follow the CEA method.
GeoVera writes private earthquake insurance that does not go through the California Earthquake Authority.

It's similar to private flood insurance that does not go through the National Flood Insurance Program.

momopi
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Re: Some questions about purchasing earthquake insurance in CA

Post by momopi » Wed Jun 13, 2018 3:27 pm

Take the insurance quotes/policies to your local State Farm insurance office and speak to an agent. I ended up buying through them and CEA policies cannot be paid via monthly installments, lump sums only.

wstrdg
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Re: Some questions about purchasing earthquake insurance in CA

Post by wstrdg » Wed Jun 13, 2018 4:16 pm

Palomar Specialty is another company that offers California EQ insurance NOT via the CEA.

jdouge
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Re: Some questions about purchasing earthquake insurance in CA

Post by jdouge » Wed Jun 13, 2018 4:36 pm

I called my home insurer, Geico (who insures my house through Traveler's).

They only offer CEA insurance every two years. Since we transferred our home coverage to them last year, they will not offer CEA insurance again until next summer. And then it will be a take-it-or-leave it CEA offer that doesn't allow us to make changes to the offer (e.g., we can't increase or reduce the 15% deductible).

They also refused to offer standalone insurance because our house is not visibly bolted to its slab foundation. Neither of our home inspection reports address the issue. We did have a friend who is a building codes inspector check our house when we bought it and he did not recommend bolting (he did recommend reinforcing our roof). We are not in an area that receives reimbursement for bolting from the State of California.

I did call our present earthquake policy holder, GeoVera, and asked why our single limit of $474,000 is so high given that our house's replacement cost is $228,000 according to our past and present home insurers. They indicated that this is because the single limit includes other structures, personal property, and loss of use coverage. To me, it seems like an opportunity to jack up our premium (double what a similar CEA policy premium would cost) and deductible ($71,000!).

Geico suggested I contact local Geico insurance agents to see they sell other standalone policies. I called the three nearest and none of them do.

Any way out of the trap? For a year, I will have to pay GeoVera too much for a policy that has too high a deductible. Then I will probably switch to a CEA policy that is skimpier than I would like.

I have emailed our code consultant friend about the bolting issue.

Thanks for any suggestions!

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sergeant
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Re: Some questions about purchasing earthquake insurance in CA

Post by sergeant » Wed Jun 13, 2018 4:49 pm

Leave GEICO for a year and obtain a CEA policy from your new insurer.
Most companies will add the CEA at anytime. Well, not immediately after an event of course.
Lincoln 3 EOW!

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celia
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Re: Some questions about purchasing earthquake insurance in CA

Post by celia » Wed Jun 13, 2018 6:31 pm

You can buy earthquake insurance from companies other than CEA, but they probably have the largest pool of money to pay out the claims.

We have been with them from the beginning (they are maybe 20 years old or so) and there hasn't been a major earthquake (reason for claims) during that time. The money can't be spent/lent to any other program, so it has been accumulating. In the early years, we were warned each year that if a major event happened and there wasn't enough money to pay all the claims, the participants would be charged an extra fee, but I haven't seen that warning for a long time.

Don't forget that with earthquake insurance, you can now choose various deductibles from 5% to 25%. The smaller your deductible, the higher your premium.

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roymeo
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Re: Some questions about purchasing earthquake insurance in CA

Post by roymeo » Wed Jun 13, 2018 6:33 pm

My agent "suggested" that while he's happy to sell me a policy, many people choose to use that money to retrofit.
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo

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celia
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Re: Some questions about purchasing earthquake insurance in CA

Post by celia » Wed Jun 13, 2018 6:49 pm

jdouge wrote:
Wed Jun 13, 2018 12:49 am
My question is: if all earthquake insurance goes through the CEA, why did I get $341 and $566 quotes for the same level of coverage?
I don't understand this question. I know of no other insurance that goes through or on top of the CEA. Are you referring to AllState, State Farm, etc. agencies that sell the CEA coverage?. Besides representing their own companies, they also represent the CEA as far as collecting premiums and filing claims for you. It doesn't make sense for CEA to have their own agents, IMO, since they would sit idle most of the time until an earthquake happened. Then they would be short-handed filing claims. Since CEA only covers earthquakes, the times they need to do anything are very limited, compared to homeowners who have houses burn, have trees fall on them or auto insurers, who have claims filed every day.
Are home insurance companies allowed to charge over the CEA numbers?
I don't understand this question either. CEA coverage costs the same regardless of who your homeowners is with. Why would they charge you a different amount if homeowners #1 collects the premium vs homeowners #2?

Homeowners insurance is very different than earthquake insurance because they cover different risks. Your homeowners insurance premium could be higher or lower than your earthquake premium. This has nothing to do with homeowner insurance agents also being able to sell earthquake insurance on behalf of the CEA.
I am particularly concerned because the latter, higher cost is what my new insurance company quoted to me last summer. If I call tomorrow and they are well over the CEA calculator's cost for the coverage I want, what are my options?
In that case, get the CEA insurance instead. :oops:

jdouge
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Re: Some questions about purchasing earthquake insurance in CA

Post by jdouge » Fri Jun 15, 2018 3:36 am

Celia, I can't explain why it happened, but last year, when I switched insurance companies, I did indeed get two different $ quotes for the same coverage through CEA. I didn't buy either, and now my present insurer will not offer me insurance through the CEA until next summer. They have also indicated that they will only sell me a fixed CEA policy. I cannot change the deductible or other parameters at all at that time.

Momopi and Seargeant, it might be worth sitting down with another agency's agent and seeing if they will get me a better deal on home + CEA insurance, perhaps just for a year, perhaps permanently.

First I will go to my county records office and research whether we are already bolted down to the foundation. That would allow me to buy through GEICO if I am bolted. Either way, I can check with Palomar -- thanks wstrdg.

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