anyone live in CA? Question re: earthquake insuran

[ktzmoh]

If you live in CA or another earthquake prone area: do you have earthquake insurance?

Im curious about your decision to buy or not buy and what you weighed.

We don't live right on a fault line, but we are in general proximity to a fairly large fault. We are on the fence about the insurance - it's so expensive and the deductible is so high - it would really have to be a huge earthquake and catastrophic damage to pay off. Plus we've heard questions about whether the insurance would pay out if damage stemmed from a fire as a result of the earthquake rather than the earthquake itself. I'm fairly sure our homeowners would not cover an earthquake related fire - so even if we purchased, there is some chance we'd still be on our own.

DH thinks that money would be far better spent retrofitting our house so we are not damaged in a moderately large earthquake.

Thoughts? Did you opt to buy it? People we know are kind of a mix - some have it and others don't.

[ktzmoh]

yeah - the fault we are on has a 7% chance of a major earthquake before 2036. But you know with earthquakes - the ability to predict is so questionable. I mean, for sure there will be a major earthquake alone one or more faults - it's just a question of which fault, when, how big and how retrofitted our house is.

The other thing about earthquakes: whereas there isn't much you can do to protect against flood damage, there are many things you can do to make your house able to withstand a major quake. That's our hesitation - would we be better off investing in retrofitting to protect ourselves against a sizeable quake, but risk being uninsured if 'the big one' hits and we have a total loss? The nice thing about retrofitting is that you can make the investment and increase the value of your home somewhat as well.

[TBM]

We don't have earthquake insurance. I don't remember exactly why, but I think after the Northridge quake it was evident that it didn't really seem to pay for people that had it, and it is expensive.

Another reason is that our house is new enough that it was built to earthquake code. The difference between this house and the place we lived before is amazing. We used to feel every little earthquake in our old place...lights swinging, stuff like that. We have only felt two earthquakes in the 18+ years that we have lived here, and they were pretty big jolts.

[Deleted]

We had it but canceled for several reasons. First, the premium almost doubled because CEA determined that a basement, even if it's underground, qualifies as a second story, so we suddenly had a two-story house. Second, we are about $100K underwater now that the market has crashed from '07 when we purchased. We have less than zero interest in this house. In fact, if we walked away (non-recourse state), we'd instantly gain $100K in net worth. I have no incentive to insure a pure liability. Third, we are a one-story (no matter what CEA says) wood frame building, and those tend to ride out earthquakes really well. Ours has ridden out several in its 100 years. Fourth, we've done a ton of retrofitting. It was already tied to the foundation when we bought it, but during our remodel, we put in lots of extra shear walls that go from ground to roof. Fifth, we are built on solid rock, not fill. Finally, I agree with you that the coverage is almost worthless. It only covers you in disasterous earthquakes, and not even well then. And in a disasterous earthquake, I'm even skeptical that CEA has enough money to pay out all claims.

It's a risk, and one we'd be a lot less likely to take if we had ANY equity, but we don't, so there you go.

[ktzmoh]

Thanks for the thoughts. Our house is 50 yrs old and withstood the 89 quake very well - all the houses on our street (all built at the same time) did really well. We aren't in Foster City or some of the areas of SF that are built on fill either, and we are wood frame as well - so that's good.

We also have the same concerns about the ability of CEA to remain solvent in the event of an earthquake disastrous enough that we would have a claim....


I'm thinking we should just invest in a good engineer to come retrofit (the most obvious thing is sheer walls in our crawl space) and learn to live with a certain amount of risk for disaster.

[Deleted]

We don't have it. We live in an area that has a few faults running through it. This area had a pretty big earthquake in the early 1900's but nothing big since then. When we were getting insurance the premium was really high ($80/ month for homeowners and an additional $114/month for earthquake) and we had a $25,000 deductible. The likelyhood that we would have damage that exceeded $25,000 is very small. As a single story home with a small 8'x12' root cellar we were fairly confident that we could ride out most earthquakes with less than $25,000 damage.
If we had a multi-story, 6,000 sq. ft. home I would be more inclined to look into it, but with 2,00 sq. ft. and a single-story it just doesn't seem worth it.
Also, our agent said that not many people elect to have it around here. So that helped sway our decision too.

[mrs.jacinthe]

We don't have it either. We live near a fault but our prediction numbers are really low and it just wasn't worth it to us.

[starlily]

No. It's expensive & the deductibles are really high. Plus most newer construction (80s and beyond) have features that attempt to minimize major damage.

[hereonceagain]

Save the money you would pay for the insurance in an savings account designated for any disaster.