Earthquake insurance in California

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nhrdls
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Earthquake insurance in California

Post by nhrdls » Mon Mar 31, 2014 4:58 pm

I did try to search for older threads and did find a few, however the threads were more than 2 or three years old.

If you are in california, do you have earthquake insurance? Would you recommend to get one?

stan1
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Re: Earthquake insurance in California

Post by stan1 » Mon Mar 31, 2014 5:19 pm

I have it since it is not very expensive where I live (less than 10% of my total homeowner's policy). I would get a quote from your home owners insurer to add a California Earthquake Authority policy. Also read the policy (deductibles). No point guessing without the facts.

hicabob
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Re: Earthquake insurance in California

Post by hicabob » Mon Mar 31, 2014 5:28 pm

I have never bothered but it is expensive here and has a huge deductible. During the 7.2 Loma Prieta earthquake my neighbors house was destroyed when it shifted about 1 foot off the foundation - yes it was bolted down - my house only had a cracked window - earthquakes are weird - one house trashed, next door ok. Neighbor didn't have quake ins. either but she got a very low cost loan to rebuild from the govt as did many others.

sscritic
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Re: Earthquake insurance in California

Post by sscritic » Mon Mar 31, 2014 5:29 pm

I didn't have it before Loma Prieta, and I didn't have it before Northridge. Those were the days when it was both affordable and underpriced (while not the same thing, the concepts are related). And I still don't have it today, although many of my friends post-Northridge were glad they had it (no one else would pay for the apartment in Malibu).

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TimeRunner
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Re: Earthquake insurance in California

Post by TimeRunner » Mon Mar 31, 2014 5:56 pm

We carry it because:
1. Earthquakes happen here.
2. Our home is a substantial asset as well as a place to live where we choose to live.
3. We can't afford to rebuild it without using investment and retirement money that we want to live on, not put into our home.
4. We don't want to take out another loan on top of the mortgage this late in our careers.

If we never collect on the policy, that's just fine. Spending a year or two rebuilding our home - well, I'd rather be doing something more fun.
One cannot enlighten the unconscious. | Endurance athletes are the Bogleheads of sports. | "I like people - I just don't want to be around 'em." - Russell Gordy

dgdevil
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Re: Earthquake insurance in California

Post by dgdevil » Mon Mar 31, 2014 6:44 pm

I had it for years until last year, via Geovera. I dropped it after my agent said he didn't have it for his house. He had also just come back from a seminar where some speakers had cast doubt on the ability of insurers to pay up in the event of a really big one. And yeah, I'll probably be dead anyway if my house crashes down the hill.

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FelixTheCat
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Re: Earthquake insurance in California

Post by FelixTheCat » Mon Mar 31, 2014 6:45 pm

My ex-wife's family used to live in Los Angeles during the time of the Northridge earthquake. The devastation there was huge. I saw foundation cracks, cracks in the walls, etc. It was all fixed with their earthquake insurance.

My area is not really an earthquake zone but I have it to protect my home. I'm more concerned with fires living in Southern California.
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malloc
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Re: Earthquake insurance in California

Post by malloc » Mon Mar 31, 2014 6:56 pm

I live in California.
I had earthquake insurance when it was affordable.
The opinion of a geologist friend, given the huge deductibles, was to just put $500 in a dedicated account each year - unless you had a 3 story house or bad soil conditions.

That said, I now have earthquake on one property.

DVMResident
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Re: Earthquake insurance in California

Post by DVMResident » Mon Mar 31, 2014 7:09 pm

I don't. It's expensive and the deductible is huge. I prefer to save the difference. If a really bad earthquake flattens a large section of LA, FEMA will probably help out.

Granted, my 800 sq house wouldn't be that expensive to rebuild and the deductible would eat a lot of the replacement costs. YMMV if you have a large/expensive home.

sscritic
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Re: Earthquake insurance in California

Post by sscritic » Mon Mar 31, 2014 7:29 pm

From my personal observations, totally unscientific, one story houses fare best, two story houses, not as well, and split levels, the worst. I read that a split level is just three boxes attached together that bang against each other as they vibrate at different frequencies. I owned a one story when I did not have insurance during the Northridge quake, and I own a one story now. If I owned something other than a one story, I might have a different attitude toward earthquake insurance.

JW-Retired
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Re: Earthquake insurance in California

Post by JW-Retired » Mon Mar 31, 2014 7:32 pm

We have earthquake insurance since we are smack on the big California earthquake fault. It is pricey...... the cost is about twice what we pay for our homeowners policy plus our umbrella policy. However, I still think it's a relative bargain. IMO, the chance of us having a huge loss from an earthquake is way higher than from a fire or some personal liability calamity.

I was home when the 1989 Loma Prieta earthquake hit us. It shook pretty hard and knocked me off my feet, but our house came through fine in '89. On the other hand, we are overdue for a really big one. That's what insurance is for.
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sscritic
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Re: Earthquake insurance in California

Post by sscritic » Mon Mar 31, 2014 7:43 pm

JW Nearly Retired wrote:fine in '89.
That does have a certain ring to it. Now if I can only figure out how to get it into my conversations. :)

dgdevil
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Re: Earthquake insurance in California

Post by dgdevil » Mon Mar 31, 2014 8:01 pm

The problem is that seismologists are quacks, and they stir up either complacency or panic. They make excellent talking heads after a quake, but where they beforehand? At the end of the day, they know as much as Joe Average - not much. Real scientists must be infuriated by the media time these CalTech folks get.

They didn't even know of the fault lines that caused the recent Shamrock Shake and the Northridge quake. So a lot of people think they are in a safe earthquake zone when in fact they could be sitting right on the epicenter of The Big One. Conversely folks who buy EQ insurance just because they are on the San Andreas fault or whatever may be throwing good money after bad. And this is just California. Is anyone in the Midwest prepared for a rupture along the New Madrid line, or a previously unknown line?

August
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Re: Earthquake insurance in California

Post by August » Mon Mar 31, 2014 9:54 pm

A midwest earthquake would be doubly devastating. The buildings are not built to withstand earthquakes like they are in CA and not very many people have EQ insurance.

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pjstack
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Re: Earthquake insurance in California

Post by pjstack » Mon Mar 31, 2014 10:25 pm

dgdevil wrote:The problem is that seismologists are quacks, and they stir up either complacency or panic. They make excellent talking heads after a quake, but where they beforehand? At the end of the day, they know as much as Joe Average - not much. Real scientists must be infuriated by the media time these CalTech folks get.
I think that's a bit (to say the least) harsh. The only way to even possibly learn about earthquakes is to study their behavior, which seismologists do.

You're right, they can't predict them any better than Joe Average (not yet, anyway), but to say that they are not "real" scientists is a mistake.
pjstack

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zebrafish
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Re: Earthquake insurance in California

Post by zebrafish » Mon Mar 31, 2014 11:09 pm

TimeRunner wrote:We carry it because:
1. Earthquakes happen here.
2. Our home is a substantial asset as well as a place to live where we choose to live.
3. We can't afford to rebuild it without using investment and retirement money that we want to live on, not put into our home.
4. We don't want to take out another loan on top of the mortgage this late in our careers.
+1

Professor Emeritus
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Re: Earthquake insurance in California

Post by Professor Emeritus » Tue Apr 01, 2014 2:14 am

dgdevil wrote:The problem is that seismologists are quacks, and they stir up either complacency or panic. They make excellent talking heads after a quake, but where they beforehand? At the end of the day, they know as much as Joe Average - not much. Real scientists must be infuriated by the media time these CalTech folks get.

They didn't even know of the fault lines that caused the recent Shamrock Shake and the Northridge quake. So a lot of people think they are in a safe earthquake zone when in fact they could be sitting right on the epicenter of The Big One. Conversely folks who buy EQ insurance just because they are on the San Andreas fault or whatever may be throwing good money after bad. And this is just California. Is anyone in the Midwest prepared for a rupture along the New Madrid line, or a previously unknown line?
OFGS I've worked with seismologists for years , you do not understand what they do. All geotechnical research is probabilistic and based on evolving maps of the affected area. They are well aware of the epistemic and aleatory uncertainty in the field. political morons whine that they cant get absolute answers. Well no, they can't. So we do the best we can. I'm in Istanbul right now, looking at old buildings. The whole area is geologically active, but no one knows when it will have the big one

As for the reason whey you can explain without being able to predict I suggest John Castii's work on "searching for certainty"

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celia
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Re: Earthquake insurance in California

Post by celia » Tue Apr 01, 2014 2:24 am

TimeRunner wrote:We carry it because:
1. Earthquakes happen here.
2. Our home is a substantial asset as well as a place to live where we choose to live.
3. We can't afford to rebuild it without using investment and retirement money that we want to live on, not put into our home.
4. We don't want to take out another loan on top of the mortgage this late in our careers.
+2
On the other hand, we are overdue for a really big one. That's what insurance is for.
Not only are we overdue for the big one, but are due for the next big one after that!
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.

fareastwarriors
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Re: Earthquake insurance in California

Post by fareastwarriors » Tue Apr 01, 2014 10:56 am

celia wrote:
TimeRunner wrote:We carry it because:
1. Earthquakes happen here.
2. Our home is a substantial asset as well as a place to live where we choose to live.
3. We can't afford to rebuild it without using investment and retirement money that we want to live on, not put into our home.
4. We don't want to take out another loan on top of the mortgage this late in our careers.
+2
On the other hand, we are overdue for a really big one. That's what insurance is for.
Not only are we overdue for the big one, but are due for the next big one after that!


What is the cost? I know there are many various factors involved but I'm curious as what people are paying.

stan1
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Re: Earthquake insurance in California

Post by stan1 » Tue Apr 01, 2014 11:05 am

There is a calculator on the California Earthquake Authority website that will give you an estimate.
http://www.earthquakeauthority.com/CEAR ... id=3&pid=3

Among the data that you need to enter are zip code, insured value, year house was built, whether it is wood frame or other construction, slab or other foundation, number of stories.

My house is $262/year -- which I consider to be affordable even though I live in an area that hasn't had many major earthquakes. It is a 2 story wood frame house built in 1998.

I ran an equivlalent quote in West LA, which was $1112/yr, and in the East Bay which was $1862/yr so it definitely does add up in some areas.

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SnapShots
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Re: Earthquake insurance in California

Post by SnapShots » Tue Apr 01, 2014 11:43 am

I'm in Oklahoma and bought earthquake insurance last month. The tremors and big bangs are constant and something we are not use to. We have to deal with tornado's: Now earthquakes. :oops:
the best decision many times is the hardest to do

dgdevil
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Re: Earthquake insurance in California

Post by dgdevil » Tue Apr 01, 2014 11:53 am

I was paying $1,200 per annum through Geovera in L.A. until I canceled. Can't remember the deductible - somewhere in the $25,000 range. On top of California Fairplan and all my other insurances, something had to go.

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celia
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Re: Earthquake insurance in California

Post by celia » Tue Apr 01, 2014 1:29 pm

I am interested in knowing the difference between the insurance offered by the California Earthquake Authority and other companies. What other companies sell it? Have you compared plans?

I am not familiar with Geovera.
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Bengineer
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Re: Earthquake insurance in California

Post by Bengineer » Tue Apr 01, 2014 1:45 pm

Do we have it? No.
Would I recommend it? Depends.

As noted by several, the insurance is expensive, the deductible is huge and it doesn't cover possessions, among other things. We're on solid ground a reasonable distance from any (known) faults. My take is that it would take "the big one" to damage our single-story house enough to get past the deductible. IMO, if the big one hits the earthquake insurance pool will be overwhelmed, with payouts being a percentage of claims.

If I lived near a fault or on ground at risk of liquification, I might assess differently.

dgdevil
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Re: Earthquake insurance in California

Post by dgdevil » Tue Apr 01, 2014 1:58 pm

celia wrote:I am interested in knowing the difference between the insurance offered by the California Earthquake Authority and other companies. What other companies sell it? Have you compared plans?

I am not familiar with Geovera.
I recommend getting an agent who can do the legwork for you. I was with CEA for many years, until my agent said Geovera was cheaper, better. There's not much choice, I'm afraid. And I hate to think what will happen to premiums in the wake of recent shakes.

ralph124cf
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Re: Earthquake insurance in California

Post by ralph124cf » Tue Apr 01, 2014 5:03 pm

When I first purchased a home in Los Angeles (1989) I had affordable earthquake insurance with a reasonable deductible. Then we had a few more earthquakes, and the deductible shot up to 10% of the value of the home, and I could not even buy full rebuilding cost insurance. I dropped the insurance in 2000.

A lawyer friend mentioned that the easiest way to maintain earthquake insurance with a 10% deductible is to take out a 90% mortgage. If your house drops into the ground, then you give it back to the bank and walk away

Ralph

vested1
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Re: Earthquake insurance in California

Post by vested1 » Tue Apr 01, 2014 9:32 pm

We have earthquake insurance with the California Earthquake Authority and pay our very low premiums through State farm. If I remember correctly it's less than $200 a year even though our home is in a seismically active area on the central coast. Our deductibles are high but in case we need it our earthquake insurance will cover the damage that wouldn't be covered by our regular homeowner's insurance. Rates used to be much higher several years ago and I avoided earthquake insurance because of that. I was somewhat surprised at the low rates when I was offered the coverage.

I worked repairing communications in 1989 after the Loma Prieta quake in Watsonville and was shocked at some of the damage I saw. My brother was watching the World Series in Candlestick Park when it hit.

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TimeRunner
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Re: Earthquake insurance in California

Post by TimeRunner » Tue Apr 01, 2014 9:48 pm

8.0 earthquake in Chile tonight. Earthquakes happen.
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