Earthquake insurance?

[vash]

What do you think California homeowners?


Sent via Jedi mind trick.

[sammyg2]

IMO earthquake insurance, with its huge deductibles, is worthless.

If there is an earthquake big enough and bad enough to do significant damage to my house, there won't be an earthquake insurance company left after three days. ...BK...

Instead the gubmint will step in like they do in all major disasters and offer zero interest loans or such and do what the insurance companies were supposed to do.

[Targa Me]

^^^
What Sammy says.

[JavaBrewer]

Similar, when I was offered a policy ~ 10 years ago the premium was very high and deductibles huge. It didn't make sense then. My home is a stick built single story on slab in North county San Diego. The area is very low risk, by California standards, for major quake damage. If my home gets destroyed in a quake then the entire region will be demolished as well.

Have the policies been improved since then?

[afterburn 549]

10 G deductible is not so bad, that's what i used to have in a quake zone.
Knowing they will not pay one penny if you do not have it, in the advent of EQ damage .
Even a 10G mouse is better than no house.

[look 171]

My neighbor a couple doors down from me is a lawyer for FEMA. She doesn't have any EQ insurance. If the EQ is big enough to knock down homes, FEMA will step in. According to her, apply immediately as soon as it happens. No EQ insurance for me here, so let the shaking begin. I have shear panel about 75% of my home in the past 10 years. Hoping I am the only standing after the big one.

[id10t]

On the flip side, here in Florida hurricane insurance is percentage based for the deductible instead of a flat dollar amount. And no, I don't have it - I'm far enough inland that the few 'canes that have passed by haven't been more than a bad storm.

My policy does have sink hole coverage (well, not so strange, good idea although most sink holes are well south of me), and the weird one is coverage for volcano damage. These two items add about $15 per year to my policy cost, so I keep them - just in case.

[aigel]

Useless. Very high deductible. And as mentioned, the Bay Area gets flattened, good luck collecting. The main value of my house is in the land anyway.

[LWJ]

According to an actuary I know, the northridge quake losses exceeded ALL earthquake insurance premiums paid in prior. In other words, it was a killer deal to the building owners that bought it.

I have and believe in EQ insurance. That said, a one story, frame built house bolted to the foundation will have minor damage in most situations.

[Evans, Marv]

I'm of the same mind as those who think it's not worth it. I'm east of JavaBrewer in the low mountains. We get jolts through here all the time. The biggest was the 7.3 magnitude quake that originated a good distance from here on the Mexican border five years ago. It shook our place pretty well for five to ten seconds. I checked out the whole structure, and we didn't get a crack anywhere. So I'm not paying large premiums and deductible.

[Charles Freeborn]

We've got it on our 100 year old house with original foundation (no rebar) Our area is way overdue for a big one - as big or bigger than CA if you trust the "experts". If a big one does hit the insurance co's will no doubt all go under and the feds will take over.

[patz]

My Godfather's house fell in 71 Sylmar quake. His his neighbor's burned. Guess who was covered?

[Noah930]

Originally Posted by afterburn 549

10 G deductible is not so bad, that's what i used to have in a quake zone.
Knowing they will not pay one penny if you do not have it, in the advent of EQ damage .
Even a 10G mouse is better than no house.

When I looked into policies about 7 years ago, the deductibles were no where near 10G. I would have snapped that up in a heartbeat. The deductibles I came across were more in the 20+% range. As in, I'd have to cough up a couple hundred thousand dollars in event of a claim.

[Tobra]

It is a scam

[ossiblue]

Originally Posted by Noah930

When I looked into policies about 7 years ago, the deductibles were no where near 10G. I would have snapped that up in a heartbeat. The deductibles I came across were more in the 20+% range. As in, I'd have to cough up a couple hundred thousand dollars in event of a claim.

This^^. Except your deductible would not be a couple of hundred thousand.

The Northridge quake changed the industry. Prior to the quake, the insurance companies underwrote the policies and, as a result, almost wiped them out. We had 21st. Century Homeowners at the time, without a quake policy, and thy dropped us as they left the home insurance market (later to return.) As a result of the quake, the state formed the CEA, California Earthquake Authority, which underwrites quake insurance and the companies join the Authority to offer the policies to their clients.

The costs of the policies vary, depending on the age, location, and construction of the house so it's difficult to cite costs but, generally, the deductible is 15% of the value of the structure, not the land--they use the same value of the structure as you have on your homeowners policy. To get an idea of your deductible costs, you'd need to estimate the square foot cost of rebuilding your house at current rates (including code upgrades) or use the value assigned to your structure on your homeowners, and take 15% of that. For example, if you have a 3000 sq.ft. home "valued" at 1.5 million dollars, the structure value would be insured for about $450K-600K. Your deductible would be 15% of that, or around $67.5K-$90K.

Still, you have to decide if the cost of your specific premium, plus the deductible, is worth the risk.

[Hugh R]

My house was the closet house to the I-15/State route 14 overpass that collapsed, during the Northridge Earthquake. I suffered a large drywall crack in a vaulted ceiling and a long crack in the plaster pool. Plus several IKEA-type wall units that were bolted to the wall but the shaking tore the particle board out of the wall anchors. I also lost several $1,000 of Waterford crystal that beat itself to death in the display cabinets. My costs to repair the drywall were a few hundred $, the pool about $1,000, and the cabinets and the crystal would not have been covered.

Current deductible, as stated above is around $60K. In a major quake, I doubt the CEA has anywhere near enough reserves to meet its obligations.

Almost forgot, I had a 7 foot tall 1930's Diebold safe that fell in the garage where my old Aston Martin DB4 would have been if I hadn't taken it that weekend to our beach house in Ventura, which is where I was when it happened. That safe is now securely lagged down. I never imagined it would topple over. The safe would have absolutely crushed the aluminum body of that car.

[Evans, Marv]

If I lived in the PNW or any area potentially affected by the San Andreas Fault, I would seriously consider EQ insurance. The San Andreas has been locked up for awhile and is supposedly due any time as is the area affected by the subduction zone off the coast of the PNW. I wonder about the availability and cost of insurance in places like Oklahoma where quakes are being caused by drilling and water injection activities, also about the ultimate liability of oil companies in the area.

[Deschodt]

Originally Posted by aigel

Useless. Very high deductible. And as mentioned, the Bay Area gets flattened, good luck collecting. The main value of my house is in the land anyway.

Very true on all of the above.... The house itself on my policy declaration is valued at 1/3 the cost of the lot, it's popsicle sticks and drywall, essentially. Not that I would wish for it, but if it were really damaged, I could rebuild it better, more earthquake proof, and with a bigger garage (and FEMA loan??) and less city hassles than trying to improve it now... Not worth it. And I'm overinsured in general...

[GH85Carrera]

When I recently raided the agreed value for my 911 I was talking to my agent. The same company insures my cars and my house. He said earthquake has the high deductible mentioned above but it is fairly cheap around here. The 5.6 quake we had in 2011 did zero damage to my house except it knocked some of the plastic bottles of oil I had on a shelf in my garage off the shelf.

https://en.wikipedia.org/wiki/2011_Oklahoma_earthquake

The house in the photo with the collapsed chimney is not too far from my house.

In the end, we do have tornado or windstorm damage coverage and of course fire and regular coverage. No earthquake coverage. We live on top of a hill and there are no rivers close by so no flood insurance either.

[drcoastline]

Originally Posted by JavaBrewer

Similar, when I was offered a policy ~ 10 years ago the premium was very high and deductibles huge. It didn't make sense then. My home is a stick built single story on slab in North county San Diego. The area is very low risk, by California standards, for major quake damage. If my home gets destroyed in a quake then the entire region will be demolished as well.

Have the policies been improved since then?

So what does that mean to you? If the whole area is demolished you don't want the value of your home because all the others are damaged?