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CEA Residential Earthquake Insurance Policies – For Agents

Insurance Policies

We've gathered some frequently asked questions to help you understand how a CEA policy can help your insured recover from the next damaging earthquake.
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:

  • Protect your policyholders from financial loss
  • Help your policyholders replace damaged or destroyed personal items
  • Be the difference between having the money to rebuild/repair a home, or having to take out a loan or trying to cover all costs themselves
  • Provide loss of use coverage if your policyholder can’t access their home due to an earthquake
Q. How can I help my insureds be better prepared for an earthquake?
A. You can help them: 
Q. My insured’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. 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. If there’s a damaging earthquake, won’t the government pay for my insureds to rebuild?
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 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. 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 insured 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. 

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