CEA Earthquake Policy ...

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masterofinvesting
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CEA Earthquake Policy ...

Post by masterofinvesting »

Hi,

As I understand it, having a CEA earthquake policy is better than having a non-CEA one because of their higher claim paying capacity. Is this correct?

But, unfortunately, I have homeowners insurance with a carrier (GEICO/Travelers) that is not in the list of participating insurers in the CEA (http://www2.earthquakeauthority.com/ins ... urers.aspx). I called a few of them and they mentioned that they cannot provide a CEA policy unless the homeowner's policy is also with them. Does this mean I need to change my homeowner's policy to a different company just to get a CEA insurance policy? Did anyone else have a different experience in this regard?

Thank You!
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Artsdoctor
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Re: CEA Earthquake Policy ...

Post by Artsdoctor »

You can't buy a CEA policy directly, it'll have to go through your homeowner insurance company. I think thath your homeowner's company is required to offer earthquake insurance (through an earthquake insurance provider, such as CEA, GeoVera, Arrowhead). I can't really tell you if one is better than the other, and I doubt the information is out there since we've not had a large enough earthquake recently to test them; major changes have occurred over the past 20 years in coverage. The only thing I could recommend is just checking the ratings of the company that Geico will offer to you.
jdouge
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Re: CEA Earthquake Policy ...

Post by jdouge »

I declined what was offered through my homeowner's insurance and solicited quotes directly from providers. Went with GeoVera due to its ratings and price. Don't remember details. The key decision is the deductible, as you can imagine. Also made sure to get (can't remember the phrase, but coverage for temporary housing costs while displaced from your home).

I hope that helps a little!
SpaceCowboy
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Re: CEA Earthquake Policy ...

Post by SpaceCowboy »

Since the changes to earthquake policies were made after the Northridge quake, I've declined earthquake insurance. They are severely limited with very high deductibles and almost no reimbursement for living expenses.
My logic was that you were much less likely to collect on them and if there was a big enough claim that enabled you to collect, then the area would most likely be a federal disaster zone with lots of other aid options. Also the land is usually worth more than the house in California and the insurance provided no protection on loss of value of the land.
EXH
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Re: CEA Earthquake Policy ...

Post by EXH »

I decided to go with CEA due to the size of it and the fact that they do have the majority of the market. Agree they will more likely be able to pay out claims, although obviously this isn't guaranteed. I do believe you would need to change your insurance to one of the many companies that participates in CEA as you do have to have home and earthquake through the same policy. The companies I spoke with certainly required this. I'm not in any way convinced that federal aid would cover buying/building me a new house. And although land prices are high, I expect it would take 500k to build a new house (mine is small!) given current construction costs - more than I can pay and a significant portion of my purchase price. If I redid my entire foundation I might not bother (and it's unlikely that I will do this any time soon), but as it stands it's worth it for peace of mind for me.
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Artsdoctor
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Re: CEA Earthquake Policy ...

Post by Artsdoctor »

I often hear people remark that if disaster strikes, they'll apply for FEMA and rely on that aid to make them whole again. This is baffling to me because we've had enough natural disasters over the past several years to learn for others' anguish.

http://www.npr.org/2016/05/24/478868270 ... fter-sandy

Also, the comments above regarding the earthquake are outdated. There have been significant changes in earthquake policies over the past year which I feel benefit he policy holder.
happyhiker
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Re: CEA Earthquake Policy ...

Post by happyhiker »

We just got an earthquake policy from USAA. It has a high deductible and so-so coverage, but we want to be able to rebuild if the house is destroyed without decimating the retirement accounts. In a small or moderate quake it will probably pay nothing, so it's really just catastrophic coverage. "Full" coverage would have been very, very expensive.
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