Our Financial Strength
More than $13 billion in claim-paying capacity
When it comes to financial strength, California Earthquake Authority (CEA) is on solid ground:
- Largest provider of residential earthquake insurance in the U.S.
- Writes 76 percent of all residential earthquake policies sold in California (as of 2015).
- More than 930,000 policies in force.
- Annual premium revenue more than $630 million.
- Over $13 billion in claim-paying ability.
CEA's financial strength has been rated as A– (Excellent) since 2002 by A.M. Best Co., the world's oldest and most authoritative rating agency of insurance companies.
Where does a premium dollar go?
Most of the funds CEA collects from premiums are reinvested into the business of insuring policyholders, not overhead.
By law, only 6 percent of CEA's premium income can be spent on operating expenses.
See CEA Financial Statements for more information.
CEA is not-for-profit, privately funded
CEA is a not-for-profit, privately funded, publicly managed organization that provides residential earthquake insurance and encourages Californians to reduce their risk of earthquake loss. The State of California is not legally responsible for CEA's liabilities, and CEA does not pay any state liabilities. Therefore, CEA assets can't be used for any state government purposes, such as repairing bridges and freeways.
- CEA only offers residential insurance. Our assets are available only to pay claims to homeowners and renters who have protected their homes by purchasing a CEA earthquake policy.
- As a not-for-profit, CEA does not pay federal income tax, so our reserves used to cover claims can grow more quickly.
- The law requires that CEA rates be actuarially sound and based on the best available science.
- CEA has sufficient funds – more than $13 billion -- to pay claims from even a devastating earthquake.
- CEA is not allowed to file for bankruptcy protection.*
* If an earthquake causes insured damage greater than the CEA's claim-paying capacity, policyholders with earthquake damage may be paid a prorated portion of their covered losses. Or, the CEA Governing Board may approve installment payments.