California Earthquake Insurance Premium Increase

TromboneAl · 05-30-2007, 09:46 AM

The premium for our CEA earthquake insurance has been level at about $270 for six years. This year it jumped to $360.

Anyone know anything about this?

Thanks,

REWahoo · 05-30-2007, 10:13 AM

Quote:

Originally Posted by TromboneAl

The premium for our CEA earthquake insurance has been level at about $270 for six years. This year it jumped to $360.

Anyone know anything about this?

Thanks,

I take it you regard the extra $90 as an earthshaking increase...

Sam · 05-30-2007, 10:27 AM

Is that all? I thought earthquake insurance is more expensive than that. $360, I think is lower than flood insurance for Houston. Not sure though, since I don't buy flood insurance.

ziggy29 · 05-30-2007, 10:29 AM

Is your coverage amount the same as it was six years ago? Seems to me if the coverage amount is tied to the cost of rebuilding (after deductible),
a 33% increase in rates is reasonable. It may well cost 33% more to rebuild your home than it did six years ago.

There are also alternatives to the CEA. GeoVera is one, and there might be others.

ziggy29 · 05-30-2007, 10:30 AM

Quote:

Originally Posted by Sam

Is that all? I thought earthquake insurance is more expensive than that. $360, I think is lower than flood insurance for Houston. Not sure though, since I don't buy flood insurance.

We lived in Houston from '03 to '06. I believe we had a $200,000 flood policy (I think it had $100K in contents coverage or something like that) for $295 per year. Of course, we weren't in a flood zone.

Sam · 05-30-2007, 10:51 AM

I am not in the flood zone either, that why I don't buy it. So if you pay $295 for a "dry zone", then I guess the premium for the flood zone has to be at least twice as much.

cute fuzzy bunny · 05-30-2007, 11:26 AM

Quote:

Originally Posted by Sam

Is that all? I thought earthquake insurance is more expensive than that.

Its cheap because it really doesnt have a lot of benefit. They charge you a LOT more if you're on a fault line or in an area of moderate-to-worse instability. To get a low rate like that, Al is probably in an area that isnt that likely to have a serious earthquake.

On top of that, most of the policies have a 10 or 15% deductible based on an overinflated reconstruction cost. Note that the vast majority of homes hit by an earthquake suffer far less than 10 or 15% of their reconstruction cost in damage. Usually your brick chimney gets screwed up, a couple of pipes break, and you have a few cracks in the walls.

Floods on the other hand can make a heck of a mess out of your place...

WanderALot · 05-30-2007, 02:52 PM

T-Al,

I think we had a conversation about this over PM. My EQ premiums went up to about $400/year. I'm in a tract house in SoCal. Every year I keep thinking I'm not going to renew it and just end up renewing it anyways because it's "so cheap".

I'm actually debating calling them up and canceling. Less than 20% of CA homeowners have EQ insurance.

Our provider is GeoVera and they seem to have better rates than CEA and offer a bit better coverage.

TromboneAl · 05-30-2007, 03:47 PM

Wander,

What were yours last year? Mostly I just want to make sure that there isn't some mistake. If everyone's premiums stayed level for 6 years, and then jumped by 30%, that's OK.

We have faults pretty close, though not like when we lived by the Hayward fault in the bay area. We feel an earthquake once a year or so.

WanderALot · 06-01-2007, 09:12 AM

Quote:

Originally Posted by TromboneAl

Wander,
What were yours last year? Mostly I just want to make sure that there isn't some mistake. If everyone's premiums stayed level for 6 years, and then jumped by 30%, that's OK.

It looks like mine was around $300 - $320 for quite a while until last year when it jumped up to $389 and this year it's just over $400.

cute fuzzy bunny · 06-01-2007, 10:07 AM

Do note that in the last few years, home 'reconstruction' costs have skyrocketed due to shortages in construction labor, increased home prices, and increases in materials costs. Plus inflation.

Might explain why things went along fairly linear for a while and then recently started to pop up.

Insurers of course are on top of these things...if it costs more to fix, they can charge you more to insure against the repairs.

05-30-2007, 09:46 AM	#1
TromboneAl Thinks s/he gets paid by the post Join Date: Jun 2006 Posts: 3,879	California Earthquake Insurance Premium Increase The premium for our CEA earthquake insurance has been level at about $270 for six years. This year it jumped to $360. Anyone know anything about this? Thanks,

05-30-2007, 10:29 AM	#4
ziggy29 Thinks s/he gets paid by the post Join Date: Oct 2005 Location: Texas Hill Country Posts: 2,094	Is your coverage amount the same as it was six years ago? Seems to me if the coverage amount is tied to the cost of rebuilding (after deductible), a 33% increase in rates is reasonable. It may well cost 33% more to rebuild your home than it did six years ago. There are also alternatives to the CEA. GeoVera is one, and there might be others. __________________ FIRE Clock: Looks more like Mr. Peabody's Way Back Machine now. I didn't want to retire anyway. waiting for the government to privatize the gains and socialize my losses in my 401K...

06-01-2007, 10:07 AM	#11
cute fuzzy bunny Give me a museum and I'll fill it. (Picasso) Give me a forum ... Join Date: Dec 2003 Location: Losing my whump Posts: 22,540	Do note that in the last few years, home 'reconstruction' costs have skyrocketed due to shortages in construction labor, increased home prices, and increases in materials costs. Plus inflation. Might explain why things went along fairly linear for a while and then recently started to pop up. Insurers of course are on top of these things...if it costs more to fix, they can charge you more to insure against the repairs. __________________ Many an optimist has become rich by buying out a pessimist

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05-30-2007, 10:27 AM	#3
Sam Thinks s/he gets paid by the post Join Date: Mar 2006 Posts: 1,743	Is that all? I thought earthquake insurance is more expensive than that. $360, I think is lower than flood insurance for Houston. Not sure though, since I don't buy flood insurance.

05-30-2007, 10:51 AM	#6
Sam Thinks s/he gets paid by the post Join Date: Mar 2006 Posts: 1,743	I am not in the flood zone either, that why I don't buy it. So if you pay $295 for a "dry zone", then I guess the premium for the flood zone has to be at least twice as much.

05-30-2007, 02:52 PM	#8
WanderALot Recycles dryer sheets Join Date: Sep 2004 Posts: 386	T-Al, I think we had a conversation about this over PM. My EQ premiums went up to about $400/year. I'm in a tract house in SoCal. Every year I keep thinking I'm not going to renew it and just end up renewing it anyways because it's "so cheap". I'm actually debating calling them up and canceling. Less than 20% of CA homeowners have EQ insurance. Our provider is GeoVera and they seem to have better rates than CEA and offer a bit better coverage.

05-30-2007, 03:47 PM	#9
TromboneAl Thinks s/he gets paid by the post Join Date: Jun 2006 Posts: 3,879	Wander, What were yours last year? Mostly I just want to make sure that there isn't some mistake. If everyone's premiums stayed level for 6 years, and then jumped by 30%, that's OK. We have faults pretty close, though not like when we lived by the Hayward fault in the bay area. We feel an earthquake once a year or so.

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