Some consumers in the state will find that rates are dropping so that the coverage is more affordable.
Two major earthquake insurance companies in California have just announced that they will be lowering the rates that they charge for the coverage against tremors in the state.
The approval was given to the insurers by the commissioner of the state on Friday.
The commissioner in California, Dave Jones, made his announcement on Friday, which said that he had approved a rate reduction of 15 percent for earthquake insurance policies provided by Chubb Insurance. This will cause the average annual premium paid by that insurer’s policyholders to fall to $5,021, from where it had previously been an average of $5,940 before the change. This, according to data from the state Department of Insurance.
The other insurer that is sending its earthquake insurance rates downward is Chartis.
On that same day, Chartis Insurance announced that its own rates would be dropping by 15 percent. This will bring the average annual amount paid in premiums by its earthquake insurance customers down to $6,061, from where they had previously been $7,292 before the changes, according to the statistics at the Department of Insurance.
According to the Department of Insurance, this will bring an overall savings to California earthquake insurance customers of approximately $15 million.
This reduction in the rates is the result of changes that have been made to the models that are using to predict the amount of damage that could occur as the result of a tremor. Commissioner Jones explained that he is hopeful that this decrease in the rates for coverage will help to encourage more residents of the state to buy earthquake insurance coverage. At the moment, the data from the state’s Insurance Department indicates that only approximately 12 percent of the homeowners in California have this type of policy.
Jones made a statement on the topic that said that “We live in earthquake country and the danger is real.” He also added that “Anything we can do to make coverage more affordable for consumers is a good thing.” Previously in 2012, there was a decrease in earthquake insurance rates by 12.5 percent by the head of that marketplace, the state administered California Earthquake Authority.