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Newport Beach Association of Realtors
Glenn PomeroyCEO, California Earthquake Authority
October 27, 2016
6 Confidential & Proprietary
The risk is REAL.
7
about earthquake insurance
8 Confidential & Proprietary
chance of a 6.7M or larger
earthquake sometime in the next
30 years
9 Confidential & Proprietary
Most Californians live within
of an active fault
10 Confidential & Proprietary
of Californians don’t have
earthquake insurance
11 Confidential & Proprietary
The 1994 Northridge
earthquake reoccurred …
Residential damage:
12
Insured: $7 Billion
Uninsured: $68 Billion
13
Find this story atwww.latimes.com
14
Find this story atlosangeles.cbslocal.com
The risk is REAL.
So is the benefit of EARTHQUAKE INSURANCE.
15
about earthquake insurance
“The will bail me out.”
Government assistance, if available, is to urgent health and safety needs.
Government loans must be .
16
earthquake insurance
Many think their covers earthquakes.
Earthquakes are under a residential policy – a separate earthquake policy is required.
17
earthquake insurance
Earthquake insurance , provides and the
.
CEA has dramatically , and now offers a wide range of ,
, and new for retrofitting older homes.
18
earthquake insurance
The risk is REAL.
So is the benefit of EARTHQUAKE INSURANCE.
CEA is a NOT-FOR-PROFIT residential earthquake insurer.
19
about earthquake insurance
#CEA20
21
Property Damage: $40 BillionResidential: $20 Billion
22
Most insurance companies stopped writing Homeowners insurance
23
GOVERNING BOARD: GovernorInsurance CommissionerState TreasurerAssembly Speaker and Senate Rules ChairNon Voting:
PRIVATELY FINANCED: 908,000 Policyholders
MISSION: EducateMitigateInsure
A not-for-profit provider of residential earthquake insurance
The risk is REAL.
So is the benefit of EARTHQUAKE INSURANCE.
CEA is a NOT-FOR-PROFIT residential earthquake insurer.
CEA has dramatically LOWERED RATES, and now offers a wide range of COVERAGE CHOICES, DEDUCTIBLE OPTIONS and new DISCOUNTS for retrofitting older homes.
25
about earthquake insurance
1996 2016
Overall inflation is up 51%
+51%Overall inflation
1996 2016
+168%Reconstruction
Costs
The cost to rebuild a home in California has sky rocketed.
CEA has lowered its ratesby a combined 55%
1996 2016
11%
‘97
22%
‘06 12%
‘12
10%
‘16
Without these rate reductions, the average CEA premium today would be more than twice as high
1996Original Policy
2016New CEAOptions
Structure
Personal Property Coverage
Deductible
Loss of Use Coverageadditional living expenses
Mitigation Discount
Replacement cost
$5,000
15%
$1,500
0%
Replacement cost
Up to $200,000
5%, 10%, 15%, 20%, 25%
Up to $100,000
Up to 20%
29
Homeowner Policies: $1,500 emergency repairs with no deductible
Policyholders are not required to pay the deductibleto receive their claim paymentLoss of Use never has a deductible
Product Enhancements
The risk is REAL.
So is the benefit of EARTHQUAKE INSURANCE.
CEA is a NOT-FOR-PROFIT residential earthquake insurer.
CEA has dramatically LOWERED RATES, and now offers a wide range of COVERAGE CHOICES, DEDUCTIBLE OPTIONS and new DISCOUNTS for retrofitting older homes.
Now Californians can choose the earthquake policies that meet their NEEDS and BUDGET.
30
about earthquake insurance
31
EarthquakeAuthority.com
32
EarthquakeAuthority.com
EarthquakeAuthority.com
34
Premium
Deductible: 15%
EarthquakeAuthority.com
35
Deductible: 5%
Premium
EarthquakeAuthority.com
36
Building Code Upgrade
Masonry veneer
Personal property
Separate deductible
Breakables
Loss of use
Deductible: 25%
Premium
EarthquakeAuthority.com
The risk is REAL.
So is the benefit of EARTHQUAKE INSURANCE.
CEA is a NOT-FOR-PROFIT residential earthquake insurer.
CEA has dramatically LOWERED RATES, and now offers a wide range of COVERAGE CHOICES, DEDUCTIBLE OPTIONS and new DISCOUNTS for retrofitting older homes.
Now Californians can choose the earthquake policies that meet their NEEDS and BUDGET.
37
about earthquake insurance
38 Confidential & Proprietary
2016
2nd IAL
Revenue Bonds
Risk Transfer
Capital
Claim-paying capacity: $12 Billion
$1.7B
$700M
$4.4B
$5.2B
$240MNew IAL
CEA's financial strength is rated as A– (Excellent) by A.M. Best Co., the world's most authoritative rating agency of insurance companies.
Financial Strength