State’s Quake Pool May Trim Deductibles, Add to Coverage

Earthquake policies with a lower deductible and more extensive coverage may be available next year through the California Earthquake Authority, a state-run pool that provides most of California’s earthquake insurance.

Policyholders and consumer advocates have complained since the CEA’s 1996 inception that the policies’ 15% deductibles are too high and that its coverage is too skimpy. Contents coverage is limited to $5,000 and expenses for living elsewhere while a home is rebuilt are capped at $1,500.

The CEA staff will present a proposal to the pool’s governing board Sept. 23 that would allow policyholders to choose either a 10% deductible or increased coverage for contents and living expenses. Consumers could choose contents coverage of $25,000 to $100,000, while living expense coverage would range from $10,000 to $15,000.

How much the enhanced policies would cost would depend on the level of coverage selected, where the policyholder lives and other factors, but they would generally be competitive with policies offered by non-CEA insurers such as GeoVera and Pacific Select, said Mark Leonard, the CEA’s legislative affairs coordinator.

If the board approves the staff proposals, the CEA will need several months to implement the enhanced coverage, Leonard said.

“We hope to have them available the first or second quarter of next year,” he said.

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Liz Pulliam covers insurance, taxes and other personal finance issues for The Times. She can be reached at liz.pulliam@latimes.com.

Bloomberg News was used in compiling this report.