Do you and I need/have Earthquake Insurance?

[cab83_750]

I know, I know ....... much like health and car insurance, when you have it nothing happens; when you don't, something happens.

So I live in 'foot massage' state. I have had earthquake insurance for the last 15 years. Our ex-insurance agent once said that this insurance is actually not worth it. Reasons:

1. Too expensive.
2. Likelyhood of happening is very very small.
3. If it does happen, the whole area would be a disaster and FEMA would kick in.
4. My current deductible is 20%.
5. It also does not cover the pool, block walls, etc. (basically just the house structure.)

So what do you think. What concerns me is that my equity on this house is over 3X what I owe!.


And yes, don't bother telling me to sell now....just like you, it is way too late!

[Flatbutt1]

we don't have earthquakes here but I have agonized over flood insurance the same way. Difference between insurance and FEMA is that we'd have to pay FEMA back...I think.

[Hugh R]

I have it, but then again, I live very near the I-5/I-14 overpasses that came down during the Northridge quake. Wood frame house and the pool cracked then, and not covered. I think I'll keep it however.

[TerryH]

Cost is outrageous and I thought I heard it's going to get a lot worse.. ie; pay more - get even less.

I had it the first few years it was offered. It became unreasonable 15 years ago and I dropped it.

[onZedge]

http://earthquake.usgs.gov/research/hazmaps/products_data/images/nshm_us02.gif

The greater Birmingham area and northern New Jersey have the same seismic hazard rating - and it is NOT the lowest.

I was actually awakened one morning by a shaking I thought was an unbalanced washing machine on spin cycle (my washer and dryer are on the second floor). It wasn't on. My cockatiel was chirping like crazy and my dogs were barking as well. It was an earthquake in NE Alabama. Nobody got hurt except for a few stone chimneys.

Don't even get me started on sink-hole insurance.

[Scooter]

I just got a notice from my insurance recently, telling me that they are raising my earthquake insurance rate. Guess they think the big one is coming?

[Dantilla]

A wood-framed house is the best there is for riding through an earthquake. If we ever have a quake big enough to take down my house, it will be the least of my worries, as society as we know it will be truely messed up, with no infrastructure left.

I don't have Earthquake insurance. Neither does my insurance agent.

[island911]

Originally Posted by Dantilla

A wood-framed house is the best there is for riding through an earthquake. If we ever have a quake big enough to take down my house, it will be the least of my worries, as society as we know it will be truely messed up, with no infrastructure left.
...

Exactly. Wood houses are very flexible. Of course stuff inside the house may go for a ride.

Knowing how hard insurance co's work to NOT pay claims, I'm inclined to not buy their product. YMMV

[tabs]

Mother once came to me asking about Earthquake insurance on the house. I asked her how long she lived in that house. She said 30 years. I asked, has there ever been any damge to the house caused by an earthquake? She said No. End of discussion. In nearly 50 years of living in SO CA there never was any earthquake damage to one of houses and I have been through some real rollers.

[rouxroux]

I think it would put my mind at ease if I lived on the New Madrid.

[The Gaijin]

Originally Posted by cab83_750

3. If it does happen, the whole area would be a disaster and FEMA would kick in.

So when something does happen (like hurricanes in the gulf) it will most likely be George Bushs fault and the rest of us (or our tax dollars through FEMA) are supposed to pay? Gee, thanks!

[campbellcj]

I don't have it either, but rely on FEMA for a bailout??? Sheesh...we have all seen how f*ed up they are! Probably better than a few years ago, but I am not sure by how much.

Typical damage to chimneys, walls, pools etc. most likely would not even meet the outrageous deductibles of the "affordable" policies. So I guess we are all betting against a total loss scenario. Our current house survived Northridge '94 with very modest damage so I think it is a reasonable bet.

[vash]

i asked around. the word on the street is that EQ insurance is not worth the high premiums. your money is WAAAY better spent having your house updated to resist the next shaker. if it does fall down, hope it burns. then the regular fire insurance kicks in? my house needs some better bolts in the foundation, and some other stuff. someday. if/when i remodel, i am going to do some overkill.

[scottmandue]

You need to check with geologist, is your house built on sand, clay, rock? How close is the nearest fault? Earthquakes can be very localized, in the Northridge quake a row of houses would go down and the houses across the street were fine.

As others have said of course construction matters a lot too.

[Moneyguy1]

What we need is "Insurance Insurance" to ensure that our insurance will actually cover losses. Too many exclusions in current policies.

[island911]

Originally Posted by Moneyguy1

What we need is "Insurance Insurance" to ensure that our insurance will actually cover losses. Too many exclusions in current policies.

Exactly. Problem is; where does it stop? The fact that 'insurance' companies put soooo many resources into figuring out how to NOT pay, or how to pay an amount less than the covered damages. No doubt insurance co's play the game of customer hoop-jumping to get full payment (the product payed for). They have behavior-predictive cmptr programs set to spit-out an amount that will have the customer weighing 'settling for less' vs more hassle. --and this is said to be a service based business. ...but at least the industry has laws and regulations forcing you to buy their product.

[Tobra]

Earthquake insurance is a waste, don't bother. If there is an earthquake and your house falls down, set it on fire and make a fire insurance claim.

[Zeke]

Originally Posted by Scooter

I just got a notice from my insurance recently, telling me that they are raising my earthquake insurance rate. Guess they think the big one is coming?

Nope. The state notified the ins co's that they won't copay as much (they underwrite the EQ ins).

Originally Posted by Tobra

Earthquake insurance is a waste, don't bother. If there is an earthquake and your house falls down, set it on fire and make a fire insurance claim.

Won't work. They'll blame the fire on a natural disaster, which is not covered.

Whatever you do in the event of an EQ., don't leave your house even if they evacuate or claim the house uninhabitable. You'll never get back in. But, it's very hard for them to enforce the orders when there is widespread damage and they will leave you alone. You may not have electricity or gas, but if you leave, game over. They can condemn anything they want and if you don't tear it down or fix it, they will tear it down and bill you.

I'm a contractor and I know what's up here. Martial law will prevail and I'll shoot anyone that comes on my property in the event of a big disaster. There will be mayhem, count on it. You should have seen the LA riots of the 60's and the 90's.

I keep foodstuffs, water, camping equipment and ammunition at the ready and I don't camp or hunt.

I have EQ ins and it costs me about $60/mo. Trouble is, if I can rebuild my house myself for the lousy percentage they will give me, the money won't be there. People in New Orleans and MS are still waiting to get a settlement in many cases.

I have credit cards that add up to over 100K in limits for that purpose. I'd probably use it all and do a BK with the house homesteaded until the federal judge could figure out a way to collect. Let him do the work.

I hate the "system," can you tell?