Short answer: State law requires CEA rates to be based on the home's location and distance to faults, soil type, construction, age and earthquake-hazard-reduction features (Insurance Code §10089.40). A pre-1979 home that is bolted to its foundation, has plywood-braced cripple walls and a strapped water heater qualifies for a premium discount of at least 5%.
The rating factors the law requires
| Factor | What it means for you |
|---|---|
| Location and proximity to faults and other geological factors | Higher-hazard areas cost more |
| Soil type | Soft or fill soils amplify shaking |
| Construction type and features | Wood frame vs. masonry, number of stories |
| Age of the dwelling | Older homes were built to older codes |
| Earthquake-hazard-reduction features | Foundation bolting, bracing, strapped water heater |
Source: Insurance Code §10089.40. The statute also says rates must be "actuarially sound," "equivalent for equivalent risks," and approved by the Insurance Commissioner before use.
Who qualifies for the retrofit discount
Under §10089.40(d), a home qualifies for a premium discount or credit of 5% if, at a minimum:
- it was built before 1979,
- it is tied (bolted) to the foundation,
- its cripple walls are braced with plywood or the equivalent, and
- the water heater is secured to the building frame.
A mobilehome qualifies if it has an earthquake-resistant bracing system certified by the Department of Housing and Community Development. The CEA board may approve a larger discount if it is actuarially sound.
Practical steps
- Keep permits, invoices and photos of any retrofit work.
- Tell your agent and ask them to confirm the discount shows on your declarations page.
- Review your deductible and limits at renewal, since earthquake deductibles are usually a percentage of the dwelling limit.
Related: what earthquake insurance covers in California and CEA vs. private earthquake insurance.
Frequently asked questions
What determines the price of a CEA earthquake policy?
Insurance Code §10089.40 requires CEA rates to consider location and proximity to faults, soil type, construction type, age of the dwelling and earthquake-hazard-reduction features. Rates must be approved by the Insurance Commissioner.
Is there a discount for retrofitting my house?
Yes. The statute sets a discount or credit of 5% for homes built before 1979 that are bolted to the foundation, have braced cripple walls and a secured water heater. The CEA board may approve more.
Do mobilehomes get a retrofit discount?
Yes, if the mobilehome has an earthquake-resistant bracing system certified by the Department of Housing and Community Development.
Are CEA rates the same everywhere in California?
No. The law says rates must be equivalent for equivalent risks, and it states the Legislature did not intend a uniform statewide flat rate.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. Not legal, tax or financial advice, and not a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.