Saturday, December 10, 2016

#EQI ▶#SocialCurrentSee®

Re: What is the average price of a home in California?
▶Bingo, bango, bongo or just BING!▶

Re: California Earthquake Authority
▶Bingo, bango, bongo or just BING!▶
The links between these two search topics (above) may not be readily apparent, but the question arises since it is true that the "authority" has $12 billion in capacity to cover claims for the Big One (an earthquake), but the question remains: How many dwellings might that represent?  The $12 billion claims coverage capacity is authentic because the source is the CEA, aka "authority" (see LINK below).

The first search link above explains that the average home price in California is $379,000, which is 7.6% lower than the average sold price in California ($410,000). If you calculate that the actual replacement cost for an existing dwelling is about 80% of market value (in normal situations), then the average replacement cost for a typical California home would be $303,200.  However, in a time of disaster and emergency, the cost of building materials and labor will escalate, pushing homebuilding costs well beyond normal levels.

The second search link above was intended to find news and #SocialCurrentSee regarding a public-private partnership in the state capital The location, K Street in Sacramento is well occupied by the HQ offices of many state government agencies, including the California Earthquake Authority (CEA) at #801 Suite 1000  As is true of virtually all state government operations, the easiest way to learn details about CEA is to visit their WEBSITE

Relatively new to the website is an earthquake insurance (EQI) estimating tool, and online calculator, that is due to help consumers determine EQI rates on their dwellings Specifically, the CEA calculator is at this LINK

Caveat The calculator is only an estimating tool and homeowners are advised to work with licensed property insurance agents for the purchase of EQI  In fact, if you live in a common interest development (aka HOA), you are allowed only to purchase EQI for your personal effects and the interior space of your dwelling alone, unless you reside in a single-family home
  So speaking of condominium properties, the external property in a condo development may be insured with a CEA policy, but only if that policy is "master coverage" purchased and owned by the HOA

This technicality is not easily or fully explained at the CEA site, hence the admonition to speak with a licensed property insurance agent before making any EQI purchase  A LIST of CEA participating insurers is found HERE

▶For future updates on specific common interest developments like these, bookmark these ▶LINKS

▶ #HOAs Today ▶#SocialCurrentSee®▶ 
#SocialCurrentSee® for more
▶ #HOA news▶

AmazonCrossing®▶ #SocialCurrentSee®▶ Congressional Pages

  • Following the unprecedented losses from the 1994 Northridge earthquake, many insurance companies either stopped or severely restricted selling new homeowners' insurance policies in California. The insurer response was largely due to state law that requires insurers to offer earthquake insurance when selling or renewing residential property insurance.
  • In September 1996, legislation to create the CEA was approved by the
    California State Legislature. On November 26, 1996, the State of California Insurance Commissioner certified that all statutory conditions necessary for the CEA to become operational had been met, and the CEA began writing earthquake policies on December 1, 1996.
  • The CEA uses its available capital (net position) to leverage approximately 
    $11.7 billion in claims-paying capacity at December 31, 2015. The CEA’s claims-paying capacity is determined from the CEA’s available capital, risk-transfer coverage, available letters of credit, debt, and post-event prospective participating insurance company assessments.
  • The CEA had 879,537 policyholders at December 31, 2015, most of whom
    insure single-family dwellings through the CEA. The CEA offers a basic residential earthquake policy to homeowners, which includes coverage for the insured dwelling and limited coverage for contents and loss-of-use if the residence is uninhabitable due to an earthquake. The CEA also offers policies to condominium unit owners and renters. For an additional premium, CEA policyholders can significantly increase insured limits on contents and for loss-of-use, and homeowners can lower their CEA policy deductible from 15 percent to 10 percent.

So, given the estimation of $303,200 to rebuild the average California home and the CEA total claim capacity of $12 billion, the results show that 38,936 California could possibly be rebuilt with the claim-payment capacity that now exists in California.  According to the USA Census Bureau statistics for 2010, there were 12.5 million occupied residential dwellings in California during that year (units owned and rentals).  Regrettably, then, the coverage capacity for CEA funds represents .00311 percent of all California residents, including owner-occupied and rentals.  Of course, the percentage is even smaller than this when 2016 data becomes available

▶ Given the publicity on CEA, we know the 10-year-old partnership is striving hard to enlist new subscribers.  Judging by the numbers to date, the task looms as a BIG endeavor.

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What does $12B Mean?
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