On June 5, 2012, I wrote about ready.gov and reminded Californians that the best way to be ready for an earthquake was to plan ahead. A typical homeowner’s insurance policy doesn’t cover a loss caused by an earthquake, so many homeowners have taken upon themselves to purchase another policy that provides earthquake insurance. In California, all earthquake policies can be obtained through various insurance carriers that have been approved by the California Earthquake Authority (CEA).

On January 1, 2012, the CEA published its most current earthquake claim manual that was approved by the insurance commissioner on December 9, 2011. This 79 page claims manual explains what an adjuster must do in the event an earthquake loss is reported. It is also a good guide to the different parts of an earthquake policy. Like a typical homeowner’s policy, there are multiple exclusions that should be noted.

When purchasing my earthquake policy, I had a couple of things in mind. What if a pipe broke after an earthquake? Naturally, without earthquake insurance I wouldn’t be covered. My second thought was of my personal possessions. What if artwork on my wall fell and broke, or perhaps that beloved figurine? After review of the CEA manual, it was clear that “Decorative or Artistic Features of a Dwelling” are not covered under the policy. In fact, the claims manual outlines at least eight sections of uncovered property such as pools, landscaping, antennas, patios, awnings, etc.

Earthquake policies are little different than any other homeowners’ policy. Know what your policy covers and excludes to understand if your loss can be recouped. Many people assume an earthquake policy covers all losses resulting from an earthquake, but that is simply not the case. The CEA claims manual is a good comprehensive guide to how your adjuster will view an earthquake claim.

To read a copy of the CEA claims manual, click here.