Anyone live in CA and have Earthquake Insurance?

[House4Me]

We are considering a move to California!


I inquired last week on an estimate quote for home insurance. Earthquake insurance is separate but they have a $58,000 deductible and the annual premium is $3,400! (Separate premium from "regular" Home owner's insurance) Does anyone actually have this? Did you go thru the California Earthquake Authority -- the insurance agent told me that was cheaper, but if the big one ever hit than the Ca Earthquake Authority would go bankrupt due to the sheer volume of claims…. 

[audry80]

We are starting the house buying process in SF and was told by multiple Real Esate Agents that most homeowners do not have Earthquake insurance because of that reason, that the claims would bankrupt the agencies.

[alleinesein]

I live in CA (and grew up out here) and NO ONE I know has earthquake insurance. The deductibles are insanely high and its just not worth it.

[mmmomof2]

The only person who I know who has Earthquake Ins was Volenti. Most people don't.

[Deleted]

Lots of people I know have it. We do @ $2300/yr. Totally worth it if you lose your home.

[konapoppy]

We don't have it and no one in my immediate or extended family has had it.

[crashgizmo]

We don't have it, nor did my family while I was growing up.

[starlily]

Nope

[Deleted]

we have a little coverage through our homeowners but that's it. I'm in the Bay Area.

[insominac]

We have no house. #rentlife

[Deleted]

Why are people not getting insurance?

[hippygirl]

I live in the Bay Area and we do not have earthquake insurance.

[irishbride2]

Feb 1, 2015 21:06:00 GMT -5 @bluesky said:

Feb 1, 2015 20:54:13 GMT -5 @spenjamins said:

Why are people not getting insurance?

We don't.  I figure if we have $2,500 to pay for the insurance, we are better off investing that money in the market and taking risk.  Our savings would be our "insurance".  I am not big on insurances in general though.  I do know that it's very rare where I live (not all that far from u!) for people to actually get coverage.

If you are actually saving that as self insurance, thats one thing. But I doubt many do that. Most do not save the cash value of their house in case of a natural disaster. 

I do not know much about earthquakes and risk, but google tells me earthquake insurance is very similar to flood insurance. Its interesting that many places require flood insurance if you have a mortgage (I'm in a federal flood zone that requires it because of earth quake risk...even though we have the same odds of a hit as NYC), but not earthquakes. 

[Deleted]

Feb 1, 2015 21:14:04 GMT -5 @juno said:

Feb 1, 2015 20:54:13 GMT -5 @spenjamins said:

Why are people not getting insurance?

Reasons one might choose not to: The deductibles are so high that unless it's THE BIG ONE, it's probably not going to cover anything.  If it's THE BIG ONE, CEQA might not have the funds to cover all claims.  FEMA has a history of stepping in when disaster strikes (right or wrong, that might be a consideration).  CA is a non-recourse state, so it makes no sense to insure the bank's interest, especially if you have little-to-no equity following the housing bust.  Retrofitting might be money better spent to protect oneself in the deductible range of damages.

FEMA would not pay to rebuild our house, though. Non-recourse still means you lose.  We do have lots of equity. Interesting.

[alleinesein]

Feb 1, 2015 20:54:13 GMT -5 @spenjamins said:

Why are people not getting insurance?

When was the last time your house (or a house in your neighborhood) incurred $50K+ in damage from an earthquake?  

The last big quake that did any damage to our house (7.2 Baja/Mexicali quake on Easter Sunday 2010) did maybe $10 damage to the house because one of the tiles in the bathroom cracked.  

Unless your house falls down chances are you will never incur enough in damages to be able to file a claim and have the insurance pay for it.  

[irishbride2]

Feb 1, 2015 21:27:09 GMT -5 alleinesein said:

Feb 1, 2015 20:54:13 GMT -5 @spenjamins said:

Why are people not getting insurance?

When was the last time your house (or a house in your neighborhood) incurred $50K+ in damage from an earthquake?  

The last big quake that did any damage to our house (7.2 Baja/Mexicali quake on Easter Sunday 2010) did maybe $10 damage to the house because one of the tiles in the bathroom cracked.  

Unless your house falls down chances are you will never incur enough in damages to be able to file a claim and have the insurance pay for it.  

So should no one outside of Miami, New Orleans (and apparently the path of Sandy) get hurricane related insurance? 


If you've made it the first 10 years of your adult life without hitting your 10k deductible for health insurance, should you drop health insurance?

I mean I get your overall point, but the bolded argument is making me scratch my head a bit. 

[alleinesein]

Feb 1, 2015 21:33:59 GMT -5 irishbride2 said:

Feb 1, 2015 21:27:09 GMT -5 alleinesein said:

When was the last time your house (or a house in your neighborhood) incurred $50K+ in damage from an earthquake?  

The last big quake that did any damage to our house (7.2 Baja/Mexicali quake on Easter Sunday 2010) did maybe $10 damage to the house because one of the tiles in the bathroom cracked.  

Unless your house falls down chances are you will never incur enough in damages to be able to file a claim and have the insurance pay for it.  

So should no one outside of Miami, New Orleans (and apparently the path of Sandy) get hurricane related insurance? 


If you've made it the first 10 years of your adult life without hitting your 10k deductible for health insurance, should you drop health insurance?

I mean I get your overall point, but the bolded argument is making me scratch my head a bit. 

Did I say that?  No I did not.  

Do you live in CA?  Have you actually looked into earthquake insurance policies?  The deductible for most policies is so high that it does not make financial sense for a lot of homeowners to pay for it.  

You cannot compare health insurance or hurricane/flood insurance to earthquake insurance.  

And what you bolded---I was specifically asking someone if any of that had happened.  If her house has been totalled from an earthquake in the past then getting insurance is a good idea based on her experience but if she lives in an area where there is little to no damage during quakes it might not be the best use of $$.

[Deleted]

Feb 1, 2015 21:38:41 GMT -5 alleinesein said:

Feb 1, 2015 21:33:59 GMT -5 irishbride2 said:

So should no one outside of Miami, New Orleans (and apparently the path of Sandy) get hurricane related insurance? 


If you've made it the first 10 years of your adult life without hitting your 10k deductible for health insurance, should you drop health insurance?

I mean I get your overall point, but the bolded argument is making me scratch my head a bit. 

Did I say that?  No I did not.  

Do you live in CA?  Have you actually looked into earthquake insurance policies?  The deductible for most policies is so high that it does not make financial sense for a lot of homeowners to pay for it.  

You cannot compare health insurance or hurricane/flood insurance to earthquake insurance.  

And what you bolded---I was specifically asking someone if any of that had happened.  If her house has been totalled from an earthquake in the past then getting insurance is a good idea based on her experience but if she lives in an area where there is little to no damage during quakes it might not be the best use of $$.

I live in an area that has had extensive damage in the past - although having your specific house previously red-tagged doesn't mean much if you live in a general area with active faults.

A burst pipe could cost 50K in damages to my house.   Of course, we have the insurance for something more catastrophic.

[scout8]

I am really surprised that you don't have to get it if you have a mortgage. Interesting.

[alleinesein]

Feb 1, 2015 21:47:36 GMT -5 @spenjamins said:

Feb 1, 2015 21:38:41 GMT -5 alleinesein said:

Did I say that?  No I did not.  

Do you live in CA?  Have you actually looked into earthquake insurance policies?  The deductible for most policies is so high that it does not make financial sense for a lot of homeowners to pay for it.  

You cannot compare health insurance or hurricane/flood insurance to earthquake insurance.  

And what you bolded---I was specifically asking someone if any of that had happened.  If her house has been totalled from an earthquake in the past then getting insurance is a good idea based on her experience but if she lives in an area where there is little to no damage during quakes it might not be the best use of $$.

I live in an area that has had extensive damage in the past - although having your specific house previously red-tagged doesn't mean much if you live in a general area with active faults.

A burst pipe could cost 50K in damages to my house.   Of course, we have the insurance for something more catastrophic.

For your house it makes perfect sense to have it.  Are you in one of the areas that got hit bad in the Northridge quake?

Our closest fault line is the Rose Canyon fault and it hasn't moved in 300+ years.  We are more concerned with the house being destroyed by fire.

[Deleted]

Feb 1, 2015 22:01:55 GMT -5 alleinesein said:

Feb 1, 2015 21:47:36 GMT -5 @spenjamins said:

I live in an area that has had extensive damage in the past - although having your specific house previously red-tagged doesn't mean much if you live in a general area with active faults.

A burst pipe could cost 50K in damages to my house.   Of course, we have the insurance for something more catastrophic.

For your house it makes perfect sense to have it.  Are you in one of the areas that got hit bad in the Northridge quake?

Our closest fault line is the Rose Canyon fault and it hasn't moved in 300+ years.  We are more concerned with the house being destroyed by fire.

We are close enough.  I don't know about our specific neighborhood.  Our house had been retrofitted before we bought it so that's good.

 I think for our ages, kids, assets, I might be more risk averse in this area than others. 

[AAM2012]

Feb 1, 2015 21:33:59 GMT -5 irishbride2 said:

Feb 1, 2015 21:27:09 GMT -5 alleinesein said:

When was the last time your house (or a house in your neighborhood) incurred $50K+ in damage from an earthquake?  

The last big quake that did any damage to our house (7.2 Baja/Mexicali quake on Easter Sunday 2010) did maybe $10 damage to the house because one of the tiles in the bathroom cracked.  

Unless your house falls down chances are you will never incur enough in damages to be able to file a claim and have the insurance pay for it.  

So should no one outside of Miami, New Orleans (and apparently the path of Sandy) get hurricane related insurance? 


If you've made it the first 10 years of your adult life without hitting your 10k deductible for health insurance, should you drop health insurance?

I mean I get your overall point, but the bolded argument is making me scratch my head a bit. 

You can't compare flood or hurricane insurance (which is typically covered under your homeowners insurance) with earthquake insurance.

Flood and hurricane insurance has much lower premiums and reasonable deductibles when compared to earthquake insurance because the risk is spread over a very large large area versus earthquake insurance which is (likely) only prominent in California.

[Deleted]

No, we were advised against it by two different insurance agents. One agent said she had it but only because her house was older (100+ years and not up to current earthquake codes) and almost paid off. She figured she had a lot of equity to lose and her house was more likely to fall down than many that are more updated/newer. Of course, we could have gotten it if we really wanted but we didn't. I believe it was $200/mo with a $25k deductible. Our agent said that our brand new house was retrofit, single story, and we are not on a fault line so we were probably better off keeping our money.

[madisen]

No earthquake insurance here.

[carfar]

Feb 1, 2015 22:06:43 GMT -5 @spenjamins said:

Feb 1, 2015 22:01:55 GMT -5 alleinesein said:

For your house it makes perfect sense to have it.  Are you in one of the areas that got hit bad in the Northridge quake?

Our closest fault line is the Rose Canyon fault and it hasn't moved in 300+ years.  We are more concerned with the house being destroyed by fire.

We are close enough.  I don't know about our specific neighborhood.  Our house had been retrofitted before we bought it so that's good.

 I think for our ages, kids, assets, I might be more risk averse in this area than others. 

Only 7% have it, so it seems like you are more risk averse than the vast majority of CA homeowners, according to this article. 

[Deleted]

Feb 2, 2015 1:07:08 GMT -5 carfar said:

Feb 1, 2015 22:06:43 GMT -5 @spenjamins said:

We are close enough.  I don't know about our specific neighborhood.  Our house had been retrofitted before we bought it so that's good.

 I think for our ages, kids, assets, I might be more risk averse in this area than others. 

Only 7% have it, so it seems like you are more risk averse than the vast majority of CA homeowners, according to this article. 

Or smarter. :-)

[aurora]

I get making the financial decision that you'd rather risk losing all equity in your home (and likely defaulting on your mortgage, assuming you don't have all that equity in savings) than carry insurance with a $50k deductible. Not that I'd make the same decision (I don't know), but that I can see the analysis.

But I'm really laughing at some of the other reasons here. Earthquakes can cause damage for hundreds of miles. Just because your particular hous hasn't been hit before doesn't mean you're safe. And also that only California cares...anyone heard of parts of Anchorage and other Alaskan coastal towns sliding into the ocean during the Good Friday earthquake of 1964?

[FishChicks]

We had earthquake insurance for all the years we owned a home in CA. We paid around $1800 each year for our 2400 square foot house. We had put 20 percent down, and we had enough cash to cover a deductible, but not rebuilding after a catastrophic loss, so we went with the insurance. I don't regret it.

[itsme]

We do not have it.

[agnes]

When we owned we did not have it.