California Insurance Commissioner Dave Jones approved a statewide rate reduction of 10 percent for earthquake insurance policies issued by the California Earthquake Authority.
The reduction is effective Jan. 1, 2016.
Jones also approved additional CEA coverage options for consumers, including deductible choices.
The CEA first proposed the rate decrease last year.
When it implements the new changes CEA will expand deductible options from today’s 10 or 15 percent, to choices of: 5, 10, 15, 20, or 25 percent.
Beginning Jan. 1, 2016, CEA will also roll-out new hazard mitigation discounts ranging from 10 to 20 percent for eligible homeowners, upon verification that the house has been retrofitted in accordance with applicable standards.
“The magnitude 6.0 South Napa earthquake that struck last August caused significant damage to many homes and is a stark reminder that California residents need to consider how best to secure their biggest asset—their home,” Jones said in a statement. “The CEA’s new options and rate reduction will give consumers more ways to protect themselves against potentially devastating losses.”
Other enhancements include higher limits options for personal property and loss of use/additional living expenses, new endorsements that provide coverage for exterior masonry veneer and breakable personal property, as well as increased coverage limits for chimneys and new coverage for energy efficiency and environmental safety upgrades.
Last month the U.S. Geological Survey released a new long-term earthquake forecast for California. USGS noted that with more faults identified in recent years, the likelihood in the next 30 years of magnitude 6.7 and larger earthquakes somewhere in California remains at 99 percent, a near certainty.
CEA has roughly about 865,000 policyholders. Statewide just 10 percent of residents with home insurance also have the separate policy needed to cover earthquake damage, according to the California Department of Insurance.
The CEA is a publicly managed, privately funded, not-for-profit organization that provides catastrophe residential earthquake insurance. CEA issues an estimated 75 percent of all residential earthquake policies purchased in California.