CEA to Use New Formula in Rate Determination

The California Earthquake Authority (CEA) will begin using a newly released, uniform scientific method in determining insurance rates and the most accurate prices for consumers.

Partially funded by the CEA, the new Uniform California Earthquake Rupture Forecast (UCERF) model reportedly allows for more uniform and accurate determination of seismic hazard throughout California. UCERF is a collaboration by the United States Geological Survey, the California Geological Survey, and the Southern California Earthquake Center and is the first statewide, uniform scientific system to determine the probability of earthquakes.

Previously, the science used in determining CEA earthquake insurance rates differed depending on whether the insured property was located in Northern California or Southern California. This meant, for example, that risks in Los Angeles and San Francisco were analyzed using different techniques.

The full effects of the UCERF model on insurance rates will reportedly not be determined until the CEA’s rate review in the summer of 2008.

Editor's note: For further information on California news and earthquakes, visit gocalifornia.blogspot.com.