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We Provide Earthquake Insurance for Californians

Understanding How Deductibles Work in a Claim Payment: Part 1

December 05, 2016

Deductibles are an important topic—especially since CEA has added more deductible options that make earthquake insurance more affordable than ever. Use a sample claim payment scenario to help your clients understand.

  • No CEA policy requires the insured to pay the deductible—the deductible is simply subtracted from the covered earthquake damage and CEA pays the remainder, up to the coverage limit.
  • CEA policyholders can choose deductibles ranging from 5% - 25% of their dwelling coverage and, depending on the type of policy, personal property coverage.
  • Loss of use and the first $1,500 of emergency repairs have no deductible.

The most important takeaway for understanding deductibles: CEA does not require customers to pay their deductible up front, or out-of-pocket, on covered losses before receiving payment on a claim.

But Wait, There's More!

Both CEA homeowners policies—with expanded coverage choices and deductible options—cover policyholders in the event of a major earthquake that causes damage to both the dwelling and personal property.

Our Homeowners Choice policy, with separate deductibles for dwelling and personal property, gives peace of mind to clients who may be more concerned about a moderate earthquake that may cause damage to their personal property or require additional living expenses.

Here are claim payment scenarios following a moderate earthquake:      Understanding Deductibles

In the above example, an earthquake caused moderate structural damage to the dwelling. Because the covered earthquake damage is less than the Dwelling deductible, we would be able to pay for your client's eligible additional living expenses. Homeowners Choice has the flexibility to cover your clients in the event of a moderate or major earthquake. And with its separate deductible feature, a claim payment is more likely after a moderate earthquake that doesn’t damage the house itself.