Earthquake insurance rates have doubled since the California Earthquake Authority was established. But consumers haven’t received better coverage in exchange. In fact, they’re receiving far less. And the coverage has large gaps in it. Also, the CEA has only limited funds, so if the “big one” hits, the CEA could go bankrupt, leaving consumers with even more costs.

These are the gaps in the CEA‘s earthquake policies:

Every Policy Has a 15% Deductible. This means a homeowner must pay the first 15% of the value of his home, not of the value of the damage. For most homeowners, losing 15% of their home’s value would be a catastrophic loss. For example, if a person’s home is worth $200,000, he would have to pay $30,000 before the insurance policy would pay a cent.

Every policy has a $5,000 cap covering personal belongings. If a homeowner loses all his belongings in an earthquake, he’ll be given only $5,000 to replace everything he owns.

Every Policy pays a maximum of $1,500 for temporary living expenses. If a family must relocate to an apartment while their home undergoes repairs, they would be allotted only $1,500. This amount might not even cover the “move in” costs of an apartment rental, especially in the Los Angeles or San Francisco Bay area.

Every policy covers only the house itself. The policies do not cover detached garages or other structures, pools, patios, landscaping, walkways, or fences.

Homeowners will pick up the tab if CEA becomes insolvent. If the “Big One” hits the CEA could run out of money to pay homeowners’ claims. If that were to happen, earthquake victims could receive pro-rated claim payments, perhaps as low as a dime for each dollar of covered damage. Policyholders would then be billed an additional 20% surcharge to bail out the CEA.

Here’s an example of what could happen to a homeowner with a CEA earthquake policy: Suppose the owner of a $200,000 house suffers the following damage in an earthquake:

One corner of the house’s foundation collapses, costing $40,000 to repair. His detached garage collapses, costing $30,000 to replace. His pool cracks, costing $10,000 to repair.

Under CEA terms, this homeowner would be responsible for paying the 15% deductible on the house, or $30,000. The insurance policy would only cover the remaining $10,000 in damage. Since the policy doesn’t cover the pool or garage, the homeowner would pay for these losses himself. The homeowner would end up paying $70,000, while the CEA insurance paid out only $10,000.