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CEA’s Rating Changes & the Science Behind Them

With CEA’s new rate and form filing effective July 1, 2019, CDI approved changes to CEA’s policy:

  • Rating territories
  • Construction years
  • Foundation types
  • Roof Types
  • Hazard Reduction Discount

These changes were made because CEA is required to base our rates on the best available science, and a new study was released that changed previously understood risk factors for earthquakes in California.

Understanding the Science Behind the Rating Changes

 UCERF3 (Uniform California Earthquake Rupture Forecast), a new earthquake fault zone and risk study, was released by the U.S. Geological Survey (USGS) in 2015.

In California, the Working Group on California Earthquake Probabilities (WGCEP) is responsible for developing statewide, time-dependent earthquake rupture forecasts for California that use best available science. These forecasts are endorsed by the USGS, the Southern California Earthquake Center (SCEC), and the California Geological Survey (CGS). These models are referred to as the Uniform California Earthquake Rupture Forecasts (UCERFs). The WGCEP is responsible for developing UCERFs using the best available science.

The latest earthquake fault zone and risk study, UCERF3, was released by USGS in 2015. The UCERF3 study:

  • Changes previous earthquake risk models.
  • Has key features that include a larger inventory of faults, and a higher likelihood of multi-fault ruptures due to a vast, interconnected fault system.
  • Reports that scientists now can consider more than 250,000 different fault-based earthquakes in assessing risk, whereas previous research and models considered far fewer.
  • Reports the likelihood for an earthquake of magnitude (M) 8 or greater in the next 30 years in the entire California region has increased 50% over previous (UCERF2) estimates.
  • Affirms that the likelihood for M6.7 and larger earthquakes somewhere in California remains near certainty (at 99%) in the next 30 years, the duration of a typical mortgage.

Learn more about the faults, earthquake history, and new science in your area, so you can better explain it to your insureds:

Understanding the Changes to Rating Territories & rating factors

All rate and form filing changes are reflected in our Premium Calculator.

Rating Territories

For all products (Homeowners, Homeowners Choice, Mobilehome, Mobilehome Choice, Condominium, and Renters), there are five new rating territories: 1, 3, 16, 21, and 28. Territory 4 has been removed.

Rating Factors

Year of Construction

Homeowners and Homeowners Choice Policies

A new rating category for dwellings built after 2004 will be added so that the year of construction categories are:

  • 2005 or later
  • 1990 – 2004
  • 1980 – 1989
  • 1960 – 1979
  • 1940 – 1959
  • 1939 or earlier

Mobilehome policies will now be rated based on the year of construction categories shown below:

  • 1995 or later
  • 1975 – 1994
  • 1974 or earlier


Homeowners and Homeowners Choice Policies

The foundation type definitions have been modified for added clarity.

  • Slab foundation
  • Raised foundation
    • Cripple wall foundations
    • Continuous concrete-stem-wall
    • Post-and-pier or a post-and-beam
    • Unreinforced masonry-brick, concrete block/stone
    • A house that is constructed on a raised foundation, but has an attached garage, with or without living space above the garage, on a slab foundation is considered to have a raised foundation for CEA rating purposes.
  • Other foundation type
    • House built above a full or partial basement
    • Houses with more than one foundation type
    • Any foundation that does not meet the definition of a slab or raised foundation

Roof Type

Homeowners and Homeowners Choice Policies

The following roof types will be considered as rating factors:

  • Composition
  • Wood Shake or wood shingle
  • Tile or slate
  • Other

If a dwelling has multiple roof types, the majority (51% or more) roof type must be stated on the application and used to determine premium.

Hazard Reduction Discount

Homeowners and Homeowners Choice Policies

Single family houses built before 1980 may be eligible for a policy premium discount if ALL the following exist:

  • the construction is wood-frame; and
  • the foundation is a raised or other foundation type; and
  • the dwelling is anchored to the foundation in accordance with California Existing Building Code (CEBC) standards; and
  • the water heater is properly secured* to the building frame.

The house must have a completed, eligible, verified, retrofit before qualifying for the discount. For an eligible retrofit, the dwelling must either have:


  • A post-and-pier, post-and-beam, or unreinforced masonry brick/stone foundation, and must, in compliance with CBC standards, have foundations that are placed continuously under all exterior bearing walls, and be anchored to the perimeter foundation. In addition, all cripple walls must be braced as noted above.

*In accordance with Guidelines for Earthquake Bracing of Residential Water Heaters (California Department of General Services, Division of the State Architect).

Foundation Type Year of Construction
1940 - 1979 1939 or earlier
Slab Foundation N/A N/A
Other Foundation - credit verified 10% discount 15% discount
Raised Foundation - credit verified 20% discount 25% discount

It’s important to note that not all raised or other foundation types qualify for this discount.

To qualify for the discount, after the retrofit is complete, a homeowner must submit a completed CEA Earthquake Insurance – Dwelling Retrofit Verification Form (PDF) to the participating insurer. A completed form must either be:

  • signed (by a licensed general contractor or a civil or structural engineer); or,
  • include a valid Brace + Bolt verification number.

The 5% self-verified discount, which has existed in past years, is no longer available as of July 1, 2019.

Mobilehome Policies

CEA policyholders will receive a premium discount if:

  • The mobilehome is reinforced by an Earthquake Resistant Bracing System (ERBS) certified by the State of California Department of Housing and Community Development; or
  • The mobilehome has been installed on an approved foundation system in accordance with subdivisions (a) or (b) of section 18551 of the California Health and Safety Code.

In order to obtain the discount, policyholders must submit to the participating insurer a copy of a final inspection report that verifies prior issuance of a building permit and that the system and installation meet one of the eligibility criteria above.

Additional Resources for you

Want the above information in handout format? Download our PDF now!

Rate & Form Filing Fact Sheet for Agents (PDF)

Ready for more?

For more information on CEA earthquake insurance policy coverage choices and deductible options, visit our earthquake insurance policies pages for agents.

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