Get California Earthquake Authority Strengthens Cat Bond Program With ...

Our public mission is to help Californians prepare for and recover from damaging earthquakes through education, mitigation and insurance. CEA insures over one million households and writes two-thirds of all residential earthquake policies sold in California.

This includes protection for furniture, appliances, clothing, sporting goods and electronics that are damaged or destroyed in the event of a major earthquake. Household items damaged by a major earthquake may be repaired or replaced under this coverage.

Earthquake insurance may exclude certain items, such as your vehicles, fence, pool and collectible items in your home. Damage to your land, such as landscaping, is also usually not covered. However, some policies include "engineering cost" options, which would cover these items.

There are three common types of triggers for a CAT bond: indemnity, industry loss, and parametric. Indemnity triggers base CAT bond payouts on the actual insurance losses experienced by the issuer, and function similarly to traditional reinsurance.

It applies to your dwelling coverage and is subject to the dwelling deductible. Covers earthquake damage to your home and structures attached to it, like your garage. Your home is covered up to the Dwelling's insured value on your homeowners insurance policy.

A catastrophe bond (CAT) is a high-yield debt instrument designed to raise money for companies in the insurance industry in the event of a natural disaster. A CAT bond allows the issuer to receive payment only if specific events—such as an earthquake or tornado—occur.

Traditional earthquake insurance covers damage caused by an earthquake by insuring “pure loss.” That means they will assess the value of the items lost and reimburse you for that specific amount – this amount will be different for different people.