CEA Coverage Changes November 1, 2023

The CEA is enacting insurance changes to their earthquake insurance policies.

In a letter sent directly to exisiting consumers. The CEA states that they are “writing to inform you about changes that are coming to your California Earthquake Authority (CEA)earthquake insurance policy..” More information is also available on their website.

The changes are numerous and confusing. The following are ” policy option changes that may affect you”… The changes that seem to this agency to be the most significant are the amount of personal property coverage that will be available moving forward. If you want personal property coverage $25,000 does not seem like a lot in California. The removal of some of the lower deductibles for older foundations is also notable.

The following changes were noted on the CEA Change of Coverage Letter:

CEA Homeowners Potential Changes Effective November of 2023

For CEA homeowners only, the following are listed as potential changes:

• For homes built before 1980 with a a raised or “other” type foundation that does not have a CEA-verified retrofit., the “5% and 10% deductible options” will be eliminated.

• “Exterior Masonry Veneer” coverage will be eliminated.

CEA Homeowners and Mobile Homeowners Potential Changes Effective November of 2023

For CEA homeowners and mobile homeowners, the following are listed as potential changes:

• “The 5% and 10% deductible options” will be eliminated for a “home with a reconstruction value of more than $1,000,000.”

All CEA Potential Changes Effective November of 2023

For all CEA Policies, including Condo, Homeowners, Mobile Homeowners, Renters, , the following are listed as potential changes:

• The highest Personal Property [Coverage C] coverage “has beenreduced from $200,000 to $25,000.” This staggering coverage change may likely be the most signficant of all of them. Personal Property is important to renters more than anyone.
• The CEA is eliminated breakables coverage. This “optional endorsement that provides coverage
  for china, crystal, glassware, and similar breakable items of personal property.”

A side note here on breakables coverage. Breakables coverage is not something we have discussed much in the past, however it is a very interesting coverage form. However if you had collections and wanted to protect those collections – I can see why one would want and need this valuable coverage.

The reduction of personal property coverage is unfortunate and perhaps one reason that Independent Quake Insurance vendors may thrive.

Additional Statements and Notes in the CEA “Changes to Your Policy” letter include the following:

For those that have a “pre-1980 home on a raised foundation” you should “consider seismic retrofitting.” This could make your home “more resistant to earthquake damage” and there is a “premium discount” for homes that meet underwriting rules. They list a discount that goes “up to 25%” yet state that “most retrofitted homes will continue to have the 5% and 10% deductible options for Coverage A…”

More information concerning these changes can be found direct on the CEA website.

Our report of these November 2023 discounts is a partial review, not every detail was included. Please see the CEA website for more complete information. It is also important to note that many of these changes may NOT change your coverage.