I received a policy renewal from Farmers for the CEA insurance for around $1000 premium. While going through the CEA insurance policy - clearly states that the claim amount may be prorated if the total claims exceed the available capital.
CEA website clearly states it has $8 Billion in funds for the claims from all sources and insures about 750000 households in the whole state. Assuming 1/3rd of the households with earthquake insurance is in Bay Area (250000) and around 150,000 sustain damage. Assume CEA will give out a maximum of $5 Billion in payouts if the earthquake will hit the bay area. The potential for maximum claim is around $33000 (Not prorated). If prorated it may be even lower or higher depending on the potential claims. The newer houses built according to the recent code provisions will have better resistant and less damage. Therefore less damage claim will occur for newer homes and more for older homes. Primarily, homes designed after 1990 are much more resistant (ours was built in 1994).
The deductible for us is $40,000, therefore it will potentially cut into our claims significantly. Contents are covered upto $5000 (almost the total cost of appliances)and loss of use is maximum 1500, which is if you have to get a hotel.
Based on the above assessment, it doesnt make sense to get the coverage since the deductible is so high.
Whats the take of FWF members on it who are in California?
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RedCelicaGT said:retmil said:Don't worry, FEMA will pay your bills.SF =/= Nawlins.A former coworker living in So. Cal. dropped his earthquake coverage after one of the Newport Beach quakes in the late 80s.
His next door neighbor did not have insurance but he did. Both homes sustained about the same amount of damage.
The neighbor got a grant from the government (not sure if it was FEMA or not) to fix his home.
Because my friend had been responsible and paid for his own insurance, he got nothing from the government. Because of his deductible being 10% of the value of the home, he ended up being out of pocket a lot more than the neighbor (IIRC, in the range of $30k more).
Xnarg said:RedCelicaGT said:retmil said:Don't worry, FEMA will pay your bills.SF =/= Nawlins.A former coworker living in So. Cal. dropped his earthquake coverage after one of the Newport Beach quakes in the late 80s.
His next door neighbor did not have insurance but he did. Both homes sustained about the same amount of damage.
The neighbor got a grant from the government (not sure if it was FEMA or not) to fix his home.
Because my friend had been responsible and paid for his own insurance, he got nothing from the government. Because of his deductible being 10% of the value of the home, he ended up being out of pocket a lot more than the neighbor (IIRC, in the range of $30k more).
That's when he decided to drop his coverage.
This works if your income is minimum wages. Last year my apartment suffered roof damage due to Hurricane Ike, however I didn't get any assistance from FEMA as my income was more than their qualification requirements.
Seems like going with increase in Personal property is the way. Even after almost 10% down, the LTV is now at 100% with the falling price. Considering I am just 1 mile away from Hayward fault. Impact may be significant.
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