The FAIR Plan provides earthquake coverage through the California Earthquake Authority (CEA), on a separate policy written in conjunction with the FAIR Plan fire policy. The FAIR Plan is one of 19 participating member companies of the CEA.
The CEA offers four types of policies: Homeowners (BEQ-3B); Homeowners Choice (BEQ-3C); Renters (BEQ-4B); and Common Interest Development (BEQ-6B). Coverage for Mobile Homes is written under the Homeowners policy.
Please visit www.earthquakeauthority.com for more detailed information about the CEA. This CEA link also provides a rate calculator to determine an approximate rate for both basic and/or supplemental coverages.
A stand-alone earthquake policy cannot be obtained. Coverage cannot be provided unless a FAIR Plan policy is in effect. CEA earthquake coverage is an optional coverage that can be requested by the applicant/insured at any time during the policy period.
Earthquake coverage is available only for individually owned residential properties (main structure only), and tenant's or condominium unit owner's personal property.
If the FAIR Plan policy is cancelled or non-renewed, the CEA policy will also be cancelled or non-renewed on the same date as the FAIR Plan policy.
Basic policy features:
- The Dwelling Coverage amount must be the same amount stated on the companion fire policy.
- The standard earthquake deductible is 15 per cent.
- Coverage is for the main dwelling only. No coverage is available for other structures such as unattached garages, swimming pools, fences and walls, satellite dishes, statues, etc.
- The basic policy limit for Contents/Personal Property is $5,000.
- The basic policy limit for Loss of Use, or Fair Rental Value is $1,500
- Losses for both structure and contents are settled on a replacement cost basis, with some restrictions.
- Loss Assessment coverage is available for condominium owners at increments of $25,000, $50,000, or $75,000, depending on the value of the condominium.
The CEA also offers an optional 10 percent deductible for dwelling policies only, in addition to several coverage options for personal property and loss of use. The 10 percent deductible is not available for Condominiums or Renters Policies.
In addition to the basic policy limits and the deductibles, the following options are available for all CEA policies for an additional premium:
- Supplemental Contents/Personal Property Coverage in amounts of: $25,000; $50,000; $75,000; and $100,000.
- Supplemental Loss of Use Coverage in amounts of $10,000; $15,000; or $25,000.
An additional limit of $10,000 for Building Code Upgrade Coverage is available for Dwelling Policies, effectively doubling the limit to $20,000. This additional limit is not available for mobile homes.
Policyholders can select one or more of these coverages in any amount or combination offered (refer to the Supplemental coverage section of the CEA application).
Homeowners Choice (Available for Policies Effective July 1, 2012 and Later)
The Homeowners Choice policy is designed to offer more choices in coverages and deliver more immediate policy benefits following a loss. These coverage options also allow greater flexibility in managing earthquake premium. Features of the Choice policy include:
- The option to purchase only Coverage A – Dwelling and Coverage B – Extensions to Dwelling, with an option to purchase, in addition, Coverage C – Personal Property or Coverage D – Loss of Use, or both.
- Separate deductibles for Coverage A – Dwelling and Coverage C – Personal Property.
- A separate deductible option of 15% or 10% for each coverage.
- The Coverage C – Personal Property deductible is waived if the Coverage A – Dwelling deductible is met by loss to covered structural property.
For additional information on the Choice product, please read the.
Damage must exceed the CEA policy deductible before any monies will be paid for structure or contents damage. Please read the policy carefully, or consult the CEA website (www.earthquakeauthority.com) for further clarification.
IMPORTANT NOTE: Loss settlements are solely dependent on monies collected and available from the CEA at the time of loss.