newport beach association of realtors · 2017-11-22 · 1996 original policy 2016 new cea options...

Newport Beach Association of Realtors

Glenn PomeroyCEO, California Earthquake Authority

October 27, 2016

6 Confidential & Proprietary

The risk is REAL.

7

about earthquake insurance


chance of a 6.7M or larger

earthquake sometime in the next

30 years


Most Californians live within

of an active fault


of Californians don’t have

earthquake insurance


The 1994 Northridge

earthquake reoccurred …

Residential damage:

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Insured: $7 Billion

Uninsured: $68 Billion

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Find this story atwww.latimes.com

14

Find this story atlosangeles.cbslocal.com

The risk is REAL.

So is the benefit of EARTHQUAKE INSURANCE.

15


“The will bail me out.”

Government assistance, if available, is to urgent health and safety needs.

Government loans must be .

16


Many think their covers earthquakes.

Earthquakes are under a residential policy – a separate earthquake policy is required.

17


Earthquake insurance , provides and the

.

CEA has dramatically , and now offers a wide range of ,

, and new for retrofitting older homes.

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The risk is REAL.


CEA is a NOT-FOR-PROFIT residential earthquake insurer.

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#CEA20

Property Damage: $40 BillionResidential: $20 Billion

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Most insurance companies stopped writing Homeowners insurance

GOVERNING BOARD: GovernorInsurance CommissionerState TreasurerAssembly Speaker and Senate Rules ChairNon Voting:

PRIVATELY FINANCED: 908,000 Policyholders

MISSION: EducateMitigateInsure

A not-for-profit provider of residential earthquake insurance

The risk is REAL.



CEA has dramatically LOWERED RATES, and now offers a wide range of COVERAGE CHOICES, DEDUCTIBLE OPTIONS and new DISCOUNTS for retrofitting older homes.

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1996 2016

Overall inflation is up 51%

+51%Overall inflation

1996 2016

+168%Reconstruction

Costs

The cost to rebuild a home in California has sky rocketed.

CEA has lowered its ratesby a combined 55%

1996 2016

11%

‘97

22%

‘06 12%

‘12

10%

‘16

Without these rate reductions, the average CEA premium today would be more than twice as high

1996Original Policy

2016New CEAOptions

Structure

Personal Property Coverage

Deductible

Loss of Use Coverageadditional living expenses

Mitigation Discount

Replacement cost

$5,000

15%

$1,500

0%

Replacement cost

Up to $200,000

5%, 10%, 15%, 20%, 25%

Up to $100,000

Up to 20%

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Homeowner Policies: $1,500 emergency repairs with no deductible

Policyholders are not required to pay the deductibleto receive their claim paymentLoss of Use never has a deductible

Product Enhancements

The risk is REAL.




Now Californians can choose the earthquake policies that meet their NEEDS and BUDGET.

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31

EarthquakeAuthority.com

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34

Premium

Deductible: 15%


35

Deductible: 5%

Premium


36

Building Code Upgrade

Masonry veneer

Personal property

Separate deductible

Breakables

Loss of use

Deductible: 25%

Premium


The risk is REAL.




Now Californians can choose the earthquake policies that meet their NEEDS and BUDGET.

37


2016

2nd IAL

Revenue Bonds

Risk Transfer

Capital

Claim-paying capacity: $12 Billion

$1.7B

$700M

$4.4B

$5.2B

$240MNew IAL

CEA's financial strength is rated as A– (Excellent) by A.M. Best Co., the world's most authoritative rating agency of insurance companies.

Financial Strength

newport beach association of realtors · 2017-11-22 · 1996 original policy 2016 new cea options...

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