Nearly 20 years after one of Southern California’s most devastating earthquakes, millions of residents have not yet taken steps to protect themselves with earthquake insurance. Today, California Insurance Commissioner Dave Jones was joined by California Earthquake Authority CEO Glenn Pomeroy and Robert Bouttier, CEO of the Automobile Club of Southern California, at the Auto Club’s Northridge branch to announce the first-ever homeowners insurance discount for those who obtain CEA earthquake coverage through the Auto Club.
The discount of up to seven percent on homeowner insurance policies is available to Auto Club members who insure their single-family homes through the Auto Club’s affiliated insurer, and also purchase or renew a CEA earthquake insurance policy. The CEA provides the majority of California residential earthquake insurance policies.
“Efforts such as this first-of-its kind discount are important incentives to encourage more homeowners to protect themselves against the potential for devastating loss,” said Commissioner Jones. “In California, it’s not a question of if, but rather when the next big earthquake will strike. Living in earthquake country means taking steps to protect your biggest asset from damage and loss.”
"CEA earthquake insurance provides Californians the financial strength to recover and rebuild after a damaging earthquake," said Glenn Pomeroy, CEO of the CEA. "As a not-for-profit organization, we're dedicated to delivering the lowest possible prices, as well as offering a variety of coverage options to meet policyholder needs."
Auto Club CEO Bouttier said that Auto Club members who choose to take advantage of the discount, available beginning Jan. 1, 2014, can contact their agent or call 888-887-4843 to add a CEA policy if they do not already have one. Auto Club insurance agents are authorized to provide CEA policy quotes and sell CEA policies.
“We believe this new homeowners insurance discount will be an incentive for our members to protect themselves from potential financial devastation in the event of an earthquake,” said Bouttier. “We know there are many reasons why homeowners do not purchase earthquake insurance. But we also know that without it, they are at risk of losing their homes with little to no chance of being able to afford to rebuild.”
The 1994 Northridge earthquake damaged or destroyed 7,000 single-family homes and caused direct estimated losses of about $25.7 billion, with about half of that financial loss occurring because of damage or destruction to wood-frame homes, according to the Public Policy Institute of California.
“While earthquake insurance does have a significant deductible, it’s a lot simpler to get a smaller loan to cover the deductible, if needed, than to get a large loan to cover the entire cost of rebuilding a house,” Bouttier said. “And the earthquake doesn’t wipe out an existing mortgage, even if it wipes out the house.”
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About the Auto Club of Southern California: The Automobile Club of Southern California serves members in the following California counties: Inyo, Imperial, Kern, Los Angeles, Mono, Orange, Riverside, San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Tulare, and Ventura. Its affiliated insurance company, the Interinsurance Exchange of the Auto Club, is the sixth largest home insurer in California and the fourth largest auto insurer.
About the California Earthquake Authority: The CEA is a publicly managed, privately funded organization that provides residential earthquake insurance and encourages Californians to reduce their risk of earthquake loss. People choosing CEA insurance get peace-of-mind from knowing they can afford to repair, rebuild, or replace their covered property that may be damaged by the next catastrophic earthquake.