<p>I was watching news and recently S. Cal. got another jolt at 4.x. It was also reported that a major earthquake will happen in CA in next 20 years. It lead me thinking of earthquake insurance. What is your attitude about the insurance? Many says the deductible is too high or the premium is outrages. </p>
<p>since the state took over and required “mini policies” (in '96), the rates are much higher than I was paying previously and the benefits are much lower – and capped. Thus, we dropped it.</p>
<p>Only about 12% of homeowners maintain EQ coverage, which is about a third of what it was prior to the State getting involved.</p>
<p>Not worth it imho. And there’s no way to accurately predict a major earthquake in SoCal in the next 20 years–the area is overdue but that isn’t the same thing as a prediction. Put the money you’d spend on premiums towards making sure that you and your house are prepared for a major disaster. </p>
<p>When we last looked into it, we determined it wasn’t worth it either. Our house had just been finished as new construction when the Northridge earthquake hit. The house had some outside stucco damage and one broken window. Taking into account the huge deductible, the house would have to be destroyed down to a pile of rubble to make it worthwhile and the premiums were outrageous. A wood frame house tied down to the foundation is a pretty safe place to be, actually. Geologic time is not human time. We may have another quake in 20 years or it may be 50 or 100 years before a major quake hits.</p>
<p>We have earthquake insurance. Slithey Tove and Blue Bayou are correct that policies are much more expensive and cover less than previously. We lived in the Valley when the last big earthquake happened. We did not have earthquake insurance and were extremely fortunate that we didn’t have damage. That being said our home is worth so much money (land value is as well) that while we would still have land value it would be over a million dollars to rebuild. </p>
<p>BTW, (and this is NOT EVER directed to the previous posters) we knew so many people who cheated…they rebuilt their homes to the extent that their homes are worth FAR MORE than they ever would have been. We knew (note past tense) a bunch of people who did this. And these people are in part why (in part) why the insurance is so expensive.</p>
<p>If your house is super severely damaged by an earthquake and you don’t have earthquake coverage, just make sure a gas line breaks in the house and the house burns down, than you can collect on home insurance for a fire loss.</p>
<p>True…but how do explain all the missing photos/paintings? (And I believe, after the last big one, insurance companies biforcated coverage…house/landscape/and stuff…three copays</p>
<p>I look horrible in orange…and I do hate the pantsuit look.</p>
<p>^^^If the gas line break is a result of the earthquake then insurance will not cover it. </p>
<p>We don’t have it either. We looked at it and determined it is not worth it. Not only can we not predict the timing of earthquakes, but we can’t predict where they will hit or where the shock waves will cause damage. I’ve been through 3 fairly major earthquakes and our house has never had major damage, even though we were very close to the epicenter of one, and other houses in the area had damage. Instead of insurance, we have chosen to beef up our foundation, keep earthquake supplies, and use lots of earthquake putty to secure our belongings. </p>
<p>We know people who just walked away from their homes after the Northridge Earthquake and quit paying their mortgages. One of our neighbors did this as their home was a total loss and they did not have earthquake insurance. They were able to get a new mortgage on another house within 2 years and they found that creditors were very forgiving after reviewing the circumstances of the foreclosure. I don’t know if that has changed in the time since, but it still seems a risky route to go. </p>
<p>Didn’t the federal government come up with low interest FEMA loans also after Northridge? </p>
<p>We have no access to earthquake insurance in our state but flood insurance is something you can buy as an extra policy. It is currently requiring an elevation survey, even if you live AT sea level. The survey costs about $650 or more PER building. I</p>
<p>Hurricane insurance USED to be included in the homeowner’s policy but after a horrific hurricane we had a while ago, they made it a separate policy with an additional premium and HUGE deductible. For a while, we didn’t have either flood insurance OR hurricane coverage, as money was a bit tight with college expenses. Now that weather is more extreme and our cash flow has improved with both kids graduated, we have started paying for BOTH flood and hurricane coverage again. It would be VERY expensive if we had to replace or rebuild our home, even though it has weathered everything just fine since it was built in 1940s or 50s. I really would prefer to pay a few thousand dollars in premiums and have insurer help finance a rebuild over having to come up with a few hundred thousands if the home needs rebuilding after being destroyed.</p>
<p>The flood planes have been revised now as well. Before, the highway was the dividing line as to which homes were in the flood plain and which weren’t. As we are 3 streets in from the highway, we were NOT in the flood plane. Since the revision, we are one street from the end of the flood plane and our flood insurance is priced accordingly. Have heard that folks that live closer to the flood plane have CRAZY high rates for their flood insurance and that influences who will purchase it.</p>
<p>We are still awaiting a quote on properties in the flood plane.</p>
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<p>That is why there is a need to install a Gas Line Earthquake Shut Off Valve for. Its required in the new construction code.</p>
<p>Fire and earthquake are two entirely different perils. I’d be surprised if a fire loss wouldn’t be covered under a fire policy because it started from a leaking gas line after an earthquake…subject to policy limits, deductibles, exclusions, fine print, laws, and anything else insurance carrier could think of to deny paying. I would be surprised if a fire loss was paid on an earthquake policy.</p>
<p>What would likely happen is there would be a huge fight between insurers or insurer and insured about the sequence of events and whether or not there was coverage. This could mean a LOT of delay with courts. If you have coverage for earthquake AND fire, the insurers would duke it out. If you don’t have earthquake, it would be insured fighting with fire insurer.</p>
<p>As we get older, we listen more to our conservative insurance broker who believes with the extreme weather, more weather related catastrophes are increasingly likely. There have been a slew of earthquakes lately around CA & elsewhere from 4-6+ on the Richter scale. They are getting so common, not much is made of them any more, and fortunately these haven’t resulted in much damage.</p>
<p>There is no coverage for tsunamis, but dunno whether perhaps flood insurance may cover? I guess I’ll have to read the policy when we finally get a printed copy. Our state is definitely at risk for tsunami and floods, as we are VERY low lying.</p>
<p>Installing an auto gas shutoff valves are also required when a property is sold, not just when one is built. At least in some counties in CA, not sure if this is statewide (if it’s not, it should be). </p>
<p>If/when a big one hits, the losses may be so huge that there won’t be enough FEMA money to cover reconstruction. Or not! (-: </p>
<p>Even if one receives a “low interest” FEMA loan, it is still a LOAN and needs to be repaid. It is NOT the same as getting insurance proceeds which do NOT need to be repaid. It may not be for the full amount of the loss, but still better in many respects than a loan. You may still qualify for some loan amount anyway.</p>
<p>When the hurricanes caused extensive damage on Kauai, some folks were insured and many weren’t; it made a difference in how hard or easy it was for the folks suffering damage to rebuild.</p>
<p>If the big one hit with the entire LA basin flattened, the earthquake insurers might go bankrupt as well. And there would be no need to rebuild since the economy would be devastated, no jobs, no reason to rebuild. </p>
<p>^^ The premises have been “buy in Central Valley as a backup” if LA and SF fall into the Pacific.</p>
<p>The more I think about it, a really Big One, would collapse the stock market, further driving down the investments, the insurers would need to pay out all the claims. </p>
<p>If it is a fall off, we won’t be here to yap around, thus, insurance or no insurance it does not matter any more.</p>
<p>But just imaging if you open the door from a house in Bakersfiled or Stockton and you have an ocean view? Do you know how much that is going to worth?</p>
<p>Have it. It may not cover as much as I like but it is better than nothing. </p>