Mitigation Program

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Mitigation Program

Overview

• Required by Statute• History• Program Description• Related Research Sponsored by the CEA• Cost Benefits • Rate Distribution

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Mitigation Program

Required by Statute

• California Insurance Code (CIC 10089.37)

• CEA Required to Set Aside 5% of Annual Investments Income for Mitigation

• Must be Available to the Public

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Mitigation Program

History

• 1st Pilot Program – 1998– 2 Counties– One Stop Shopping– A Dismal Failure– What we Learned

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Mitigation Program

SAFER Program(State Assistance for Earthquake Retrofitting)

• Free seismic inspections with digital survey• Latest technology and science; CUREE, state-of-

the-art database, laser measuring, web based contractor training and bidding

• Trained licensed contractors• Low-interest loans backed by Fannie Mae

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Mitigation Program

Inspections Include

• Foundations and Cracks• Cripple Walls• Water Heaters• Chimneys• Soil and Drainage

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: Mitigation Program

SAFER Results: What we found

• 7,100 inspections completed

• 87% improperly strapped water heaters

• 47% unbraced cripple walls

• 41% inadequate or no foundation bolting

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Mitigation Program

SAFER Results: Independent Survey

• 90% reported satisfaction• 77% “very satisfied”• 47% acted on one or more recommendations• 49% completed all recommendations• 3 in 4 homeowners who had not acted planned to

do so in the near future

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Mitigation Program

What we Learned

• People are interested in the seismic stability of their homes

• People will not take the initiative on their own• Preliminary assessment can streamline program• 25% of homes only needed water heater retrofit

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Mitigation Program

Cost Analysis

– Program Ran 21 Months– 7,100 Assessment– 3,345 Complete or Partial Retrofits– 1,639 Complete Retrofits– Total Cost - $5.9 Million– $3,600 – Average Cost Per Retrofit

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Partnerships

Continued emphasis on results driven, science-based programs with broad consumer appeal

CEA sponsored shake table test of full-scale wood-frame home

Mitigation Program

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Mitigation Program

Additional Research

Cal Tech– Premium Incentives Research– Computer Simulation– Determine the Appropriate Mitigation

Discount

Future Research– Slab Versus Raised Foundations

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Mitigation Program

Rate Distribution

– Contiguous Rating Territories Versus

Non-Contiguous Rating Bands– Help to Reduce Adverse Selection