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Debunking CEA Earthquake Insurance Deductible Myths

There are several outdated myths about CEA deductibles that your customers may still believe. We want to help you debunk those myths, to help your clients understand that—with new coverage choices and deductible options—earthquake insurance is more affordable than ever. Below are examples of the most common myths, along with responses to help you speak to your customers about CEA policies.

Myth #1: "It is highly unlikely that a minor earthquake will result in damage greater than the deductible."

Fact: Experts agree that even a minor earthquake can result in significant damage, depending on things like location, depth of the quake and a structure's resistance to seismic damage. And remember, without a separate earthquake policy, you will pay 100 percent of recovery costs yourself.

Myth #2: "The deductible is so high that nothing will be paid if there is an earthquake."

Fact: Some coverages, such as the first $1,500 of emergency repairs on a CEA homeowner's policy, and loss of use, are never subject to a deductible. And with the Homeowners Choice policy, thanks to the separate deductible option, personal property payment can be more likely after a moderate quake that doesn't damage the dwelling. And now, with new deductible options ranging from 5 to 25 percent, you can choose the deductible that best meets your needs and budget.

Myth #3: "I have to pay the deductible out of pocket before any repairs can be made to my house."

Fact: CEA policy deductibles are the amount that is "deducted" from an insured loss, so your clients do not have to pay the deductible out of pocket in order to receive a claim payment from CEA.

Remember, the residential fire policy does not cover ANY damaged caused by or resulting from an earthquake. If your clients are not financially protected by earthquake insurance, they will have to pay out of pocket for 100 percent of their repair or replacement expenses, as well as the costs to live and eat elsewhere while their house is being repaired.