california homeowners - do you have earthquake insurance?

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blueleaf
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california homeowners - do you have earthquake insurance?

Post by blueleaf » Sat Jul 15, 2017 2:00 pm

Hi folks,

We live in the Bay Area, and we're trying to decide whether it's smart to get earthquake insurance. We moved into a single family home in Oakland last summer.

Curious what other bogleheads who own homes in CA have decided. Here's my thinking so far:

Pros:
- insures against catastrophic losses in the case of a huge earthquake
- We're risk averse it would put my mind at ease a bit

Cons
- relatively expensive - would add about $1300/year to our homeowner's insurance
- high deductible- 15% (~$40ishk)deductible means we would still be paying for most repairs ourselves
- maybe the biggest con for me is that a huge earthquake big enough to do more than $40k of damage to our house would likely be leveling tons of other houses as well. Would the state insurance fund even be solvent to pay out in that situation?

Any thoughts or suggestions?

Thanks,

Thesaints
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Re: california homeowners - do you have earthquake insurance?

Post by Thesaints » Sat Jul 15, 2017 2:46 pm

I'm insured. Catastrophic losses are the only ones worth insuring against. No doubt our conditions will be a lot better than the non-insured in the event of a major one.
The new CEA plans allow for 5 different deductibles, by the way, and maybe you can lower your premium by eliminating non-catastrophic coverages.

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celia
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Re: california homeowners - do you have earthquake insurance?

Post by celia » Sat Jul 15, 2017 2:56 pm

We have it.

CEA started over 10 years ago and they used to warn you that if we had a big earthquake such that the claims paid out were more than what was in CEA's assets, there would be a surcharge to those participating. I haven't noticed the warning lately and doubt many claims have been paid, so their reserves should be quite hefty by now. So their rates have come down and you now have your choice of deductibles with corresponding premiums.

Insurance from CEA is separate from homeowners, but premiums and claims are handled by your homeowner's agent on behalf of the state agency.
Last edited by celia on Sat Jul 15, 2017 3:43 pm, edited 1 time in total.

Thesaints
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Re: california homeowners - do you have earthquake insurance?

Post by Thesaints » Sat Jul 15, 2017 3:01 pm

How much claim-paying capacity does CEA have?
CEA has more than $14 billion in claims paying capacity and has maintained an A- (Excellent) rating with A.M Best. CEA could cover all its claims if the 1906 San Francisco, 1989 Loma Prieta, or 1994 Northridge earthquake reoccurred today.

Afty
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Re: california homeowners - do you have earthquake insurance?

Post by Afty » Sat Jul 15, 2017 3:03 pm

We have it, but it's required by our lender so we didn't actively make the decision to carry it. Our insurance company, Amica, underwrites it themselves, and it's separate from the state fund. So it's less likely to have a shortfall in case of a large earthquake.

lws
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Re: california homeowners - do you have earthquake insurance?

Post by lws » Sat Jul 15, 2017 3:18 pm

I have it.

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Re: california homeowners - do you have earthquake insurance?

Post by sschullo » Sat Jul 15, 2017 4:50 pm

Yes, with CEA too.
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Big Dog
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Re: california homeowners - do you have earthquake insurance?

Post by Big Dog » Sat Jul 15, 2017 5:39 pm

had it but dropped it.

House is wood, on a slab, bolted. Most likely damage will be chimney collapsing, and to repair that is what about the deductible would run. Just didn't think the benefit was worth it.

manuelku
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Re: california homeowners - do you have earthquake insurance?

Post by manuelku » Sat Jul 15, 2017 5:42 pm

Owned in california until mid 2016 - never bought it and was always a bit nervous. Rent an apartment now and whenever I see the ads I just laugh and laugh.

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FrugalInvestor
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Re: california homeowners - do you have earthquake insurance?

Post by FrugalInvestor » Sat Jul 15, 2017 5:46 pm

When we lived in the Pacific Northwest we were insured for earthquake and wouldn't have considered not doing so. The 'big one' is a certainty, it's just a matter of when. I assume that it's the same story for California.

https://www.theatlantic.com/science/arc ... ly/495407/

From the article:
This means that there is about a 20 percent chance that northern Oregon—a region that includes Portland and Astoria—will be hit by a magnitude-8.0-or-higher quake in the next 50 years. (Previously, the area was estimated to have about a 12 percent chance of facing such a quake.) Washington state has between a 14 and 17 percent chance of facing a big one, up from an 8 to 14 percent chance.
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Re: california homeowners - do you have earthquake insurance?

Post by cadreamer2015 » Sat Jul 15, 2017 7:38 pm

Yes, we have earthquake insurance, but in the San Diego area it is much less expensive than LA or SF Bay, due to lower earthquake risk. We had a ~$30,000 payout from our earthquake insurance after the Northridge quake (we then lived in the Los Angeles area), even after the 10% (~$40k) deductible.
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inbox788
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Re: california homeowners - do you have earthquake insurance?

Post by inbox788 » Sat Jul 15, 2017 7:42 pm

FrugalInvestor wrote:When we lived in the Pacific Northwest we were insured for earthquake and wouldn't have considered not doing so. The 'big one' is a certainty, it's just a matter of when. I assume that it's the same story for California.

https://www.theatlantic.com/science/arc ... ly/495407/

From the article:
This means that there is about a 20 percent chance that northern Oregon—a region that includes Portland and Astoria—will be hit by a magnitude-8.0-or-higher quake in the next 50 years. (Previously, the area was estimated to have about a 12 percent chance of facing such a quake.) Washington state has between a 14 and 17 percent chance of facing a big one, up from an 8 to 14 percent chance.
Cost is still too high for me. A 20% chance of the big one in the next X years (X < 100) doesn't mean that 20% of all California homes will be destroyed. Not even 20% within a certain distance from the epicenter. If the home isn't 100% destroyed, the damage to first 10-20% is still your responsibility.

The Northridge earthquake is estimated to cost $44B in damage, with a surprising (high to me) $15B covered by insurance. If you look at the cost of $1000/policy x 10M policies in SoCal, that's about 4 year payback. We don't have this scale earthquakes every 4 years. Nowhere close. Hopefully the money is going towards a huge reserve for the earthquake that's going to cause 10X the damage or about $0.5T, but more likely than not, it's simply going to insurance profits. I'm taking my savings and building my own reserve fund, and even though it will take me decades to never to recover if I'm unlucky to be hit, I like the odds given past performance.

http://money.cnn.com/2014/08/24/news/ec ... index.html

denovo
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Re: california homeowners - do you have earthquake insurance?

Post by denovo » Sat Jul 15, 2017 7:57 pm

blueleaf wrote: Any thoughts or suggestions?

Thanks,
There have been quite a few threads on it. Here is a recent one you may find illuminating viewtopic.php?t=220606 and a few others. https://www.google.com/search?sitesearc ... earthquake

As I said in that first thread, one thing to consider is how much skin you have in the game (down payment) i.e. what equity you have in the house. Especially, in CA. If most of the property is indebted mortgage I would lean against it until you have built up more equity through more mortgage payments or increase in price. CA is a non-recourse state for home purchases. If you walk away, the bank can only repossess the home, they can not come after you for the balance of the mortgage debt if the proceeds from the sale are not sufficient.

schmitz
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Re: california homeowners - do you have earthquake insurance?

Post by schmitz » Sat Jul 15, 2017 8:30 pm

Couple questions since I didn't want to start a new thread on this:

1) would you recommend using our current home insurance company or California earthquake authority? Is CEA legit?

2) what is the standard decidable that most people get?

WarChest
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Re: california homeowners - do you have earthquake insurance?

Post by WarChest » Sat Jul 15, 2017 9:11 pm

It's all about your home value (the actual structure) vs your land value.

In many (dare I say most?) of the major population centers, the land value exceeds the structure value. My actual house is worth something like $250k and the land is worth roughly $1.2mm. In this situation or something with a similar ratio, it makes zero sense to even consider the insurance. Now if I were to do a big remodel and increase the structure value significantly, then yeah, I'd probably carry insurance for a few years at least. Self insure later down the line when liquid net worth builds back up.

SrGrumpy
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Re: california homeowners - do you have earthquake insurance?

Post by SrGrumpy » Sat Jul 15, 2017 9:23 pm

cadreamer2015 wrote:Yes, we have earthquake insurance, but in the San Diego area it is much less expensive than LA or SF Bay, due to lower earthquake risk.
I love these "low-risk" areas -- until they get rocked by a previously unknown faultline and the media-hogging seismologists say, "Oops!" Meanwhile the suckers in L.A. and S.F. keep getting milked in order to subsidize those areas.

Anyway, food for thought re: San Diego, from the Los Angeles Times last month:

New research released this week found that a fault under the heart of San Diego can produce stronger and more frequent earthquakes than previously thought. It’s the second study in recent months pointing to heightened quake risks in the San Diego area.

http://www.latimes.com/local/california ... story.html

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sergeant
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Re: california homeowners - do you have earthquake insurance?

Post by sergeant » Sun Jul 16, 2017 1:06 am

schmitz wrote:Couple questions since I didn't want to start a new thread on this:

1) would you recommend using our current home insurance company or California earthquake authority? Is CEA legit?

2) what is the standard decidable that most people get?
You get earthquake insurance from CEA through your current home insurance company. I have CEA insurance through Allstate. You cannot get it directly from CEA.

CEA is legit but read through everything. My policy clearly states that they may not pay anywhere near my policy limits if a huge earthquake wipes out their reserves. The state is not on the hook for anything and will not make you whole in the event of a loss. My policy clearly states that the CEA is not backed by the State of California.

I went with a 20% deductible. Read up on what this means. Some here are confused what this really means and/or covers.
Lincoln 3 EOW!

blueleaf
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Re: california homeowners - do you have earthquake insurance?

Post by blueleaf » Sun Jul 16, 2017 1:07 am

Thanks all, some great info to think about in this thread. I think we'll probably go ahead and get the earthquake coverage, but there's good arguments on both sides.

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Re: california homeowners - do you have earthquake insurance?

Post by Carefreeap » Sun Jul 16, 2017 11:48 am

WarChest wrote:It's all about your home value (the actual structure) vs your land value.

In many (dare I say most?) of the major population centers, the land value exceeds the structure value. My actual house is worth something like $250k and the land is worth roughly $1.2mm. In this situation or something with a similar ratio, it makes zero sense to even consider the insurance. Now if I were to do a big remodel and increase the structure value significantly, then yeah, I'd probably carry insurance for a few years at least. Self insure later down the line when liquid net worth builds back up.
We're of the same opinion as you. Earthquake coverage excludes any land loss (a concern we would have living on a hill). Our structure is worth about $500k and we can self insure that. Our lot is worth about $1M+ because of its location and ocean view.

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Re: california homeowners - do you have earthquake insurance?

Post by Mudpuppy » Sun Jul 16, 2017 12:07 pm

denovo wrote:As I said in that first thread, one thing to consider is how much skin you have in the game (down payment) i.e. what equity you have in the house. Especially, in CA. If most of the property is indebted mortgage I would lean against it until you have built up more equity through more mortgage payments or increase in price. CA is a non-recourse state for home purchases. If you walk away, the bank can only repossess the home, they can not come after you for the balance of the mortgage debt if the proceeds from the sale are not sufficient.
It's non-recourse UNLESS you refinanced. Refinance loans were not required to be non-recourse until the law was changed and that change took effect on January 1, 2013. Any refinance loans issued before January 2013 could be recourse loans. Also, cash-out refinances after January 2013 can be recourse loans. The law change for January 2013 only requires non-recourse refinances for loans that refinance the original balance plus any fees associated with the refinance.

So don't assume you can just toss the keys to the lender and walk away after an earthquake unless you've never refinanced or you're sure your refinance loan falls under the provisions for a non-recourse refinance loan.

And I do have earthquake insurance. I also have flood insurance. Neither is required by the lender because I am far enough away from active faults and the river, but that also makes the premiums negligible for the catastrophic protection provided.

Garthilk
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Re: california homeowners - do you have earthquake insurance?

Post by Garthilk » Sun Jul 16, 2017 10:24 pm

I live in CA and do NOT have earthquake insurance.

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tooluser
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Re: california homeowners - do you have earthquake insurance?

Post by tooluser » Sun Jul 16, 2017 11:09 pm

I live in Los Angeles (many years, having experienced several big earthquakes so far) and came to the conclusion that I still do not require it, despite the improvements in the last few years.

The very high deductible makes it very unattractive to me. Most of the value of property here is in the land, not the structures. My structures would essentially need to be a total loss to make it worth the current insurance prices. It essentially doubles the cost of standard homeowner insurance, for only a narrow and highly offset coverage increase.

In the event of a major quake there would likely be low interest loans available to rebuild.

Bottom line is that the loss would not be catastrophic to me (though it would certainly be a negative impact). I think there may be a greater usefulness for those who just purchased and do not have the income or equity to overcome such an event easily.
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TxInjun
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Re: california homeowners - do you have earthquake insurance?

Post by TxInjun » Mon Jul 17, 2017 6:13 am

Premiums vary to almost the neighborhood level. I live in central San Jose, and my premium was quoted at almost $4K per year. My guess is this is because the 'hood we live in used to be a marsh before it was drained, so the soil is softer than say in the hills like Los Gatos, and will liquefy more easily under vigorous shaking.

I did not get earthquake insurance for the following reasons:
- As others have noted, there is low risk of land loss. More than 50% of the property value is land, maybe 66%
- The house was mostly rebuilt, meeting the building code for 2014. Maybe the older chimney and windows in the front of the house will go, but the house should generally be strong given the more recent vintage
- No mortgage left, so less worried about wiping out capital
- The premium was too high, even with 20% deductible, for me to feel it was a good deal

TxInjun

AlwaysBeClimbing
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Re: california homeowners - do you have earthquake insurance?

Post by AlwaysBeClimbing » Mon Jul 17, 2017 1:49 pm

TxInjun wrote: - No mortgage left, so less worried about wiping out capital


TxInjun

This statement confuses me, if you don't have a mortgage anymore shouldn't you should be more worried about "wiping out capital", not less?

DeliciousDuck
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Re: california homeowners - do you have earthquake insurance?

Post by DeliciousDuck » Mon Jul 17, 2017 2:53 pm

We live in CA and do not have earthquake insurance for our current house. We're looking at buying a new one and will reevaluate then.

One factor that influenced our decision was that we went to a special Hazard Mitigation booth at the Farmer's Market - something setup by the county. They entered our address and said that with the last several earthquakes + a theoretical one, our house would sustain at most $45K in damage. Because we're saving for a downpayment on the next home, we're self-insured for now. (Depending on how accurate this modeling software is).

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steve roy
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Re: california homeowners - do you have earthquake insurance?

Post by steve roy » Mon Jul 17, 2017 3:03 pm

Yup, the Mrs. and I have insurance. We are California natives who have ridden out multiple quakes (Yippee Ki Yay!) and wouldn't think of NOT having it, though premiums can be pricey. We currently have insurance with USAA.

Steve
Last edited by steve roy on Mon Jul 17, 2017 3:08 pm, edited 1 time in total.

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FelixTheCat
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Re: california homeowners - do you have earthquake insurance?

Post by FelixTheCat » Mon Jul 17, 2017 3:07 pm

I would have insurance appropriate for the area you live in. For example, I would have flood insurance if my area historically had a flood or two. CA is known for fires and earthquakes.

I have earthquake insurance.
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Re: california homeowners - do you have earthquake insurance?

Post by PugetSoundguy » Mon Jul 17, 2017 3:24 pm

We live in Seattle and have earthquake insurance. Like the California policies, ours in general has a huge deductible but one important area of coverage has no deductible: cost for comparable replacement housing while the insured structure is being repaired. After the "big one" hits, good luck finding contractors or reasonably priced temporary replacement accommodations. With our policy, that problem is transferred to the insurance company.

2015
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Re: california homeowners - do you have earthquake insurance?

Post by 2015 » Mon Jul 17, 2017 6:42 pm

I have it and am glad I do. Here's some links regarding probabilities of earthquakes in California:

http://www.earthquakesafety.com/earthquake-faults.html

http://scedc.caltech.edu/earthquake/southern.html

http://scedc.caltech.edu/earthquake/southern.html

Incidentally, just four days ago not-so-good news was released (again!) regarding earthquake possibilities for LA's westside:

https://www.google.com/search?q=the+hol ... &tbs=qdr:m

TxInjun
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Re: california homeowners - do you have earthquake insurance?

Post by TxInjun » Mon Jul 17, 2017 7:02 pm

AlwaysBeClimbing wrote:
TxInjun wrote: - No mortgage left, so less worried about wiping out capital


TxInjun

This statement confuses me, if you don't have a mortgage anymore shouldn't you should be more worried about "wiping out capital", not less?
I can see it may be a confusing comment: a better way may be to say we can manage to self-insure for the expected loss of value.

My original comment was along the lines of:
If the house is worth $1M and I have $250K equity, and the rebuild takes $250K, I have wiped out my equity;
If the house is worth $1M and I have $1M equity, and the rebuild takes $250K, I still have $750K in equity and its worthwhile to stay and fix.

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snackdog
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Re: california homeowners - do you have earthquake insurance?

Post by snackdog » Mon Jul 17, 2017 7:27 pm

We live pretty close to the San Andreas fault. Unless you live in a very valuable 19th century brick house with no seismic retrofits, the insurance makes little sense. The premiums are huge compared to the risk of damage even assuming the big one occurs tomorrow. It is pretty hard to damage a well built wood frame house beyond what your deductible will be. (Multistory apartments built over weak garage structures are another matter, as we saw in Northridge in 1994.) More damage typically occurs from landslides and fires, which typically are excluded on EQ policies (fire may covered on your homeowner's policy). If you are risk averse, I would redirect the insurance money into seismic retrofits first - cripplewall bracing and whatnot.

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Re: california homeowners - do you have earthquake insurance?

Post by aeronina » Mon Jul 17, 2017 7:32 pm

We live in Los Angeles county and don't have earthquake insurance and haven't had it for the past 34 years. Cost is too high and the deductible ($40,000 if I remember correctly) makes it not worth it.

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Re: california homeowners - do you have earthquake insurance?

Post by Sandi_k » Mon Jul 17, 2017 9:18 pm

We are CA natives, and do not have it. Our reasoning:

- 90% of the Loma Prieta claims in the Bay Area (1989) were under the deductible amount (i.e., no insurance payout was made).

- Our home is of relatively recent construction, and has a bolted foundation, double shearwall construction, etc.

- The premiums are not a good relationship to value.

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Re: california homeowners - do you have earthquake insurance?

Post by davehica » Mon Jul 17, 2017 9:53 pm

We live pretty much on top of the Hayward fault. 100 year old house that has survived every earthquake between then and now. Did a full earthquake retrofit for $9k last year but decided not to pay for earthquake insurance. High cost coupled with low likelihood of a catastrophic failure that would be needed to hit the deductible.

IMO, you're much better off investing the first few year's premium in a retrofit. This is an interesting read on the value of retrofits:

http://www.mcvicker.com/twd/apa/eqguide/eqguid06.htm

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Re: california homeowners - do you have earthquake insurance?

Post by nisiprius » Tue Jul 18, 2017 6:35 am

1) Low-probability, high-consequences events are exactly where insurance is appropriate.

2) Earthquakes are unpredictable, not only in terms of when they will hit, but also in terms of where they hit. Four of the largest earthquakes in U.S. history occurred in the general area of Missouri. It's nowhere near the edge of a plate and seismologist basically don't know why they happen, only that they do happen. Again, they occurred in the 1800s when there wasn't much infrastructure and not much in the way of scientific recordkeeping.

3) We live on the East coast, in an area that is historically known to be seismically active and to have had a major earthquake in the past. It's just that it was so long ago that there wasn't any major infrastructure to destroy.

We carry earthquake insurance. We hope and expect it to be a total waste of money.
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Re: california homeowners - do you have earthquake insurance?

Post by madbrain » Tue Jul 18, 2017 7:00 pm

I live in a home with a close to $2M rebuilding cost (according to insurance company adjusters who have come by, from multiple insurers).
15% deductible would be about $300K . Annual premium would be about $7000 . This is about 4 months worth of mortgage payments, but not deductible. I have never carried it so far. My other insurance bills are already high enough . I think if it was in the $2000 - $3000 range and deductible, I would.

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Re: california homeowners - do you have earthquake insurance?

Post by Thesaints » Tue Jul 18, 2017 7:06 pm

If 7k are a lot to pay, just imagine 1.7M

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Re: california homeowners - do you have earthquake insurance?

Post by SrGrumpy » Tue Jul 18, 2017 7:10 pm

nisiprius wrote: We live on the East coast ... We carry earthquake insurance. We hope and expect it to be a total waste of money.
What's your premium/deductible, as a matter of interest? Is it common in your circle?

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Re: california homeowners - do you have earthquake insurance?

Post by madbrain » Tue Jul 18, 2017 7:22 pm

Thesaints wrote:If 7k are a lot to pay, just imagine 1.7M
You are assuming I would rebuild an identical home if it was completely destroyed. Both are very unlikely.

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Re: california homeowners - do you have earthquake insurance?

Post by cchrissyy » Tue Jul 18, 2017 8:07 pm

my normal insurance company clarified that although they don't cover earthquake damage, they DO cover damage from fires that started in an earthquake. The house is in a severe fire zone and when I worry about a major earthquake I am truly more concerned about a resulting fire than direct earthquake damage like the house collapsing. That changed the calculus for me, along with what others already said about high premiums, high deductibles, and the fact that I mostly have land value not structure value anyway.

Thesaints
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Re: california homeowners - do you have earthquake insurance?

Post by Thesaints » Tue Jul 18, 2017 8:22 pm

madbrain wrote:
Thesaints wrote:If 7k are a lot to pay, just imagine 1.7M
You are assuming I would rebuild an identical home if it was completely destroyed. Both are very unlikely.
Wouldn't be better to downsize now and cash the difference, instead of waiting for the next big one ?


I've heard many friends say that the first thing they would do in the event of a bad earthquake is setting the ruins on fire :happy

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Re: california homeowners - do you have earthquake insurance?

Post by madbrain » Tue Jul 18, 2017 8:38 pm

Thesaints wrote:
madbrain wrote:
Thesaints wrote:If 7k are a lot to pay, just imagine 1.7M
You are assuming I would rebuild an identical home if it was completely destroyed. Both are very unlikely.
Wouldn't be better to downsize now and cash the difference, instead of waiting for the next big one ?
The next big one may or may not come in my lifetime, and even if it does, it's far from a certainty that it would completely destroy the property to the point that it would needs a full rebuild. I have no desire to downsize now as long as I'm working in this area. Earthquake risk is going to be there in most places in the bay area.
I've heard many friends say that the first thing they would do in the event of a bad earthquake is setting the ruins on fire :happy
Pretty sure that would constitute insurance fraud.

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Re: california homeowners - do you have earthquake insurance?

Post by TxInjun » Fri Sep 22, 2017 5:35 pm

Can California / Bay Area folks comment on how much their earthquake insurance costs them? I received a renewed quote for $3320 to protect me for $800K dwelling value, with a 15% deductible (that's $120K!). I'm continuing to lean toward not getting it, given the size of the deductible.

Also, I'm curious how Portland / Oregon earthquake insurance works. Is there a similar Oregon Earthquake Authority?


Is there a way to look up if a house has been earthquake-code?


Thanks!

TxInjun

otinkyad
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Re: california homeowners - do you have earthquake insurance?

Post by otinkyad » Sat Sep 23, 2017 2:41 am

We have CEA insurance on $600k with a 15% deductible for $200/year. I don't know what we would do if it cost 10 times as much, as others here are saying. We also pay $800/year for our homeowners insurance. Are people paying 10 times that as well?

I'd like to understand why people are deciding that the deductible is too high. The only reasons I can think of are that you simply could not pay it, or that walking away would be a better deal than paying it (essentially, if you have less equity in the house than the deductible). What other scenarios would make it a bad deal?

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Re: california homeowners - do you have earthquake insurance?

Post by celia » Sat Sep 23, 2017 3:05 am

TxInjun wrote:
Fri Sep 22, 2017 5:35 pm
Can California / Bay Area folks comment on how much their earthquake insurance costs them?
It doesn't make sense to compare your rates against anyone else's, except maybe your next door neighbor who bought the same kind and size of house that you did. Your rates will be higher if you have more risk, ie are closer to a faultline, how old your house is, what kind of construction it is, if it was built to earthquake standards or retrofitted, if your water heaters are strapped down, how far you are from a hydrant (fires can start if a gas line breaks).

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unclescrooge
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Re: california homeowners - do you have earthquake insurance?

Post by unclescrooge » Sat Sep 23, 2017 4:57 am

Carefreeap wrote:
Sun Jul 16, 2017 11:48 am
WarChest wrote:It's all about your home value (the actual structure) vs your land value.

In many (dare I say most?) of the major population centers, the land value exceeds the structure value. My actual house is worth something like $250k and the land is worth roughly $1.2mm. In this situation or something with a similar ratio, it makes zero sense to even consider the insurance. Now if I were to do a big remodel and increase the structure value significantly, then yeah, I'd probably carry insurance for a few years at least. Self insure later down the line when liquid net worth builds back up.
We're of the same opinion as you. Earthquake coverage excludes any land loss (a concern we would have living on a hill). Our structure is worth about $500k and we can self insure that. Our lot is worth about $1M+ because of its location and ocean view.
I'd be more worried about natural erosion than earthquakes.

I remember back in 1999 when El Nino struck southern California, a couple of ocean view properties on a hill in Malibu slid into the ocean.

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unclescrooge
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Re: california homeowners - do you have earthquake insurance?

Post by unclescrooge » Sat Sep 23, 2017 4:59 am

celia wrote:
Sat Sep 23, 2017 3:05 am
TxInjun wrote:
Fri Sep 22, 2017 5:35 pm
Can California / Bay Area folks comment on how much their earthquake insurance costs them?
It doesn't make sense to compare your rates against anyone else's, except maybe your next door neighbor who bought the same kind and size of house that you did. Your rates will be higher if you have more risk, ie are closer to a faultline, how old your house is, what kind of construction it is, if it was built to earthquake standards or retrofitted, if your water heaters are strapped down, how far you are from a hydrant (fires can start if a gas line breaks).
Are you sure? Seems like the several quotes I got from friends with earthquake insurance is about $1300/yr.
Last edited by unclescrooge on Sat Sep 23, 2017 8:21 am, edited 1 time in total.

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unclescrooge
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Re: california homeowners - do you have earthquake insurance?

Post by unclescrooge » Sat Sep 23, 2017 5:02 am

madbrain wrote:
Tue Jul 18, 2017 7:00 pm
I live in a home with a close to $2M rebuilding cost (according to insurance company adjusters who have come by, from multiple insurers).
15% deductible would be about $300K . Annual premium would be about $7000 . This is about 4 months worth of mortgage payments, but not deductible. I have never carried it so far. My other insurance bills are already high enough . I think if it was in the $2000 - $3000 range and deductible, I would.
What sort of mega mansion costs $2M to build? Is it a historic craftsman?

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unclescrooge
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Re: california homeowners - do you have earthquake insurance?

Post by unclescrooge » Sat Sep 23, 2017 5:05 am

Sandi_k wrote:
Mon Jul 17, 2017 9:18 pm
We are CA natives, and do not have it. Our reasoning:

- 90% of the Loma Prieta claims in the Bay Area (1989) were under the deductible amount (i.e., no insurance payout was made).

- Our home is of relatively recent construction, and has a bolted foundation, double shearwall construction, etc.

- The premiums are not a good relationship to value.
That's my thinking too.

I bought an older home and just spent a boatload bringing it up to code structurally. It's bolted to the foundation, metal straps between floors, and house the house is now sheer walled. I ain't afraid of no earthquake!

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Voltron
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Re: california homeowners - do you have earthquake insurance?

Post by Voltron » Sat Sep 23, 2017 9:16 am

I have it.

Plug in your address here. Will show you the fault lines on a map like google. Very scary if live near a fault like me. Shows risk of major earthquake. App for phone is decent too.

http://temblor.net/

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