California Earthquake Authority - Version 2.0 Homeowner Policy Deductibles

HOW TO FILE A CLAIM

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About Earthquake Insurance
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Deductibles
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To obtain CEA coverage, you must first have a companion residential insurance policy written through a CEA participating insurance company.

Deductibles

CEA earthquake insurance is intended to protect your assets in the event of catastrophic loss—in order to receive benefits from your CEA earthquake coverage, your claim must exceed set deductibles.

CEA policy deductibles are a calculation of the share of loss for which a policyholder is responsible—it is not an amount of money a policyholder must have or pay before receiving money from the CEA.

Deductible for Dwelling Coverage

If your dwelling sustains eligible earthquake damage in excess of the deductible, you are eligible to a claim payment from the CEA. The deductible amount is used to determine the amount of your claim payment.

The dwelling deductible is calculated as a percentage of the insured value of the dwelling structure. The insured value is the amount of coverage your insurer has specified as Coverage A: Dwelling in your homeowners insurance policy—this amount can be found on the declarations page of your homeowners insurance policy.

The CEA policy offers two deductible options: the standard base-limit deductible of 15% or a 10% deductible option.

A CEA dwelling deductible is either 10% or 15% of the insured value of the dwelling. This table illustrates how to calculate a CEA dwelling deductible, using an insured value of $100,000. (In calculating your deductible, please use your own dwelling's insured value, as stated on your CEA policy's declarations page.)

	Deductible Selected by the Policyholder	x	Insured Value of Dwelling	=	Amount of Deductible
Example 1	15%	x	$100,000	=	$15,000
Example 2	10%	x	$100,000	=	$10,000

Only covered damage to the dwelling counts toward meeting the deductible. This means that, regardless of the amount of damage to your home's contents (or "personal property"), structural earthquake damage to your dwelling must exceed the deductible before a CEA policy would be available to pay any loss to the dwelling or any loss to personal property. Certain other conditions may apply to your loss—please read your policy carefully.

Once structural dwelling damage exceeds the deductible, the CEA will authorize payment for the insured loss, up to the insured value of your dwelling.

You do not have to pay the deductible before the CEA pays for earthquake damage to your home—the deductible is only used to calculate the payable portion of your claim; you don't have to make actual out-of-pocket expenditures before you receive payments on your CEA claim.

How Deductibles Are Used to Determine Claim Payments (All three Examples assume the policyholder has selected a base-limits deductible of 15%, and the policyholder's dwelling has an insured value of $100,000. The claims below are made only for damage to the dwelling.)
	Amount of Eligible Dwelling Damage	–	Amount of Deductible	=	Dwelling Claim Payment
Example 1	$13,500	–	$15,000	=	$0 Damage to the dwelling did not exceed the deductible - the claim is not eligible for payment.
Example 2	$45,000	–	$15,000	=	$30,000*
Example 3	$120,000	–	$15,000	=	$100,000* Eligible for payment, but not more than the insured value of dwelling.
* Under the CEA base-limits policy, paid dwelling claims are eligible for up to an additional $10,000 for building code upgrades.

Deductible for Personal Property Coverage

Damage to personal property is not covered unless the dwelling deductible is met. If the dwelling deductible is met, no additional deductible applies for your Personal Property coverage.

Deductible for Additional Living Expense/Loss of Use Coverage

There is no deductible for Additional Living Expense/Loss of Use coverage.