flood and earthquake insurance for house

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anoop
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flood and earthquake insurance for house

Post by anoop » Wed Apr 04, 2018 1:14 pm

My house is not in a flood zone, nor in a seismically active area (I did feel very slight tremors from an earthquake about 150 miles away).

However, given that weird things can happen I decided to look into quotes.

If I add earthquake ($300) and flood insurance ($450), it will more than double my annual premium.

Is it recommended?

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N1CKV
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Re: flood and earthquake insurance for house

Post by N1CKV » Wed Apr 04, 2018 1:24 pm

My house is not in a flood zone (well, technically everything has a zone, mine is "Zone X").
My elevation was built to be 2 feet above the record flood.
In 2016 a sub-tropical low sat over my region and pounded us with rain.
The results were ~3 feet of water in my house.
Take a minute and look around to imagine how much of your house and contents is within that range.
Now imagine having to drag it all to the curb and figure out how to rebuild/ refurnish while being suddenly homeless.
Been there done that, without insurance. I now have flood insurance.

I do not have earthquake insurance. In my region it's not even offered. The soil consistency eats any seismic activity.
I have met a lot of people that claim to love money, but they also seem to be the same people that are in the biggest hurry to get rid of it.

LiterallyIronic
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Re: flood and earthquake insurance for house

Post by LiterallyIronic » Wed Apr 04, 2018 2:03 pm

Insurance works because they spread the risk out over lots of people. However, floods and earthquakes affect everyone in the area. So it is more difficult to spread the risk around. That's why those are more expensive riders. I don't believe earthquake coverage is even offered in my area - at least not from the homeowners insurance providers I checked.

runner3081
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Re: flood and earthquake insurance for house

Post by runner3081 » Wed Apr 04, 2018 4:35 pm

When we bought our house it was in zone AOB, 100-year flood plain.

The mortgage holder required insurance. Just last year, we were moved to X, which is a 500 year flood zone.

The cost is only $277 per year and it was very hard to cancel at that rate, we will likely keep it until it goes up significantly.

After doing a fair amount of reading about FEMA and its flood maps, it is a big joke and I don't trust them, one way or another.

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Watty
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Re: flood and earthquake insurance for house

Post by Watty » Wed Apr 04, 2018 10:21 pm

anoop wrote:
Wed Apr 04, 2018 1:14 pm
If I add earthquake ($300) and flood insurance ($450), it will more than double my annual premium.
What is the house worth?

When I bought my first house I make sure that it was outside the 100 year flood zone but a few years later when I refinanced the house I had to buy flood insurance because the flood maps had been redrawn.

I thought that was ridiculous since the house was on top of 20 foot hill and it was about a quarter of mile from a small river that was normally about 15 feet wide.

A few years later there was a freak weather patten and the 15 foot river was now a mile wide(literally) and my house was sandbagged. The crawl space flooded and if the water had been six inches higher there would have been major damage. In today's dollars I had maybe $20K of flood damage, which the flood insurance mainly paid for.

Floods can be a lot worse than you can imagine.

I have moved since then and when we were looking for a house we made sure that there was no chance of any house that we would buy could flood so we did do not have flood insurance now.

We do have earthquake insurance because we are in the southeast which has more earthquake risk than you might expect. Normal home insurance usually excludes all sorts of earth movement which includes things like landslides and slumping which is another good reason to get earthquake insurance since it should cover that.

https://earthquake.usgs.gov/hazards/learn/

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anoop
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Re: flood and earthquake insurance for house

Post by anoop » Thu Apr 05, 2018 1:01 am

Thanks for the replies so far.

The earthquake map is very useful. I am in Roseville in the Sacramento area.

As far as flooding, we have a small creek nearby, but I am at least 20-30 ft above the lowest houses near the creek. And the creek typically has only enough water to allow mosquitoes and other bugs to breed in abundance, not really enough water flowing. It was never a risk even when we had heavy rains the winter before last.

The closest I came to having to worry about a flood was when the Oroville dam north of where I live was at risk of failing.
https://www.orovilledaminfo.com/area-ev ... tions.html
http://www.caloes.ca.gov/HazardMitigati ... 202016.pdf
Even then, the inundation map showed we'd be safe.
Watty wrote:
Wed Apr 04, 2018 10:21 pm
What is the house worth?
Would that change whether or not I should get either insurance?

scifilover
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Re: flood and earthquake insurance for house

Post by scifilover » Thu Apr 05, 2018 8:07 am

There was an earthquake in Dixon in 1892 with an est. MM of 6.5. (MM = moment magnitude...modern version of Richter)
Things to consider....
Is your home single story or two story? Is your home structurally wood frame? If two story is part of 2nd floor above garage? Modern single story wood frame homes are relatively safe up to MM of 6. Two story not quite as good especially if home built above garage. How old is home? Older homes might have been built without the framing bolted to the foundation.

In CA, your EQ policy would likely be from the CA Earthquake Authority. These policies are issued with a 15% of Coverage A deductible. So a $300,000 policy would have a $45000 deductible. To exceed this amount, your home would have to come off the foundation. This happened in the Northridge event (MM 6.7), but only to homes quite close to the epicenter

You have to take EQ frequency maps with a grain of salt....The San Andreas Fault is 30 million years old, and we have about 100 years of scientific history, and a couple hundred more of anecdotal info. Many fault lines are unknown until the the fault moves. Currently EQ events are not predictable.

Rather than spend on an EQ policy, you could consult an EQ remediation engineer. For a few thousand, it is possible to significantly strengthen single family homes.

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UpsetRaptor
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Re: flood and earthquake insurance for house

Post by UpsetRaptor » Thu Apr 05, 2018 9:01 am

I couldn't believe the high deductible on EQ insurance when quoting things out last home purchase. It was 20% of the value of the house, which equated to a six figure amount. That's a LOT of damage that would need to be caused, in order to exceed. I'm not in an epicenter zone (red or bright orange on map above), so I passed.

anoop
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Re: flood and earthquake insurance for house

Post by anoop » Thu Apr 05, 2018 2:48 pm

UpsetRaptor wrote:
Thu Apr 05, 2018 9:01 am
I couldn't believe the high deductible on EQ insurance when quoting things out last home purchase. It was 20% of the value of the house, which equated to a six figure amount. That's a LOT of damage that would need to be caused, in order to exceed. I'm not in an epicenter zone (red or bright orange on map above), so I passed.
In my case, deductible is 10% of dwelling coverage, which is mid 5 figures.

anoop
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Re: flood and earthquake insurance for house

Post by anoop » Thu Apr 05, 2018 2:51 pm

scifilover wrote:
Thu Apr 05, 2018 8:07 am
There was an earthquake in Dixon in 1892 with an est. MM of 6.5. (MM = moment magnitude...modern version of Richter)
Things to consider....
Is your home single story or two story? Is your home structurally wood frame? If two story is part of 2nd floor above garage? Modern single story wood frame homes are relatively safe up to MM of 6. Two story not quite as good especially if home built above garage. How old is home? Older homes might have been built without the framing bolted to the foundation.

In CA, your EQ policy would likely be from the CA Earthquake Authority. These policies are issued with a 15% of Coverage A deductible. So a $300,000 policy would have a $45000 deductible. To exceed this amount, your home would have to come off the foundation. This happened in the Northridge event (MM 6.7), but only to homes quite close to the epicenter

You have to take EQ frequency maps with a grain of salt....The San Andreas Fault is 30 million years old, and we have about 100 years of scientific history, and a couple hundred more of anecdotal info. Many fault lines are unknown until the the fault moves. Currently EQ events are not predictable.

Rather than spend on an EQ policy, you could consult an EQ remediation engineer. For a few thousand, it is possible to significantly strengthen single family homes.
It's a single story home with slab foundation and wood frame built in 2015.

beardsworth
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Re: flood and earthquake insurance for house

Post by beardsworth » Thu Apr 05, 2018 3:30 pm

anoop wrote:
Wed Apr 04, 2018 1:14 pm
My house is not in a flood zone, nor in a seismically active area (I did feel very slight tremors from an earthquake about 150 miles away).

However, given that weird things can happen I decided to look into quotes.

If I add earthquake ($300) and flood insurance ($450), it will more than double my annual premium.

Is it recommended?
I'm assuming that your house is one of your largest single assets, and that replacing it would be financially painful, and that $450 a year for flood insurance (even though you have doubts you'll ever make a claim) actually represents a very tiny portion of the home's value.

Do a Google search for flood maps outdated. Then buy the flood insurance.

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Watty
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Re: flood and earthquake insurance for house

Post by Watty » Thu Apr 05, 2018 4:10 pm

anoop wrote:
Thu Apr 05, 2018 1:01 am
Watty wrote: ↑Wed Apr 04, 2018 11:21 pm
What is the house worth?
Would that change whether or not I should get either insurance?
Yes, The policies you mentioned would cost about $75 a month. If it is a million+ dollar house then that is basically meaningless compared to the other costs of home ownership. If it costs a lot less then the insurance cost might be more of a factor.
anoop wrote:
Thu Apr 05, 2018 1:01 am
I am in Roseville in the Sacramento area.


I am only vaguely familiar with that area but isn't a lot of the Sacramento area considered delta area? If so that that could not only be bad for floors but a huge factor in earthquakes is the soil type and silty areas can have earthquake liquefaction (google this).

If you are not on a rocky hillside then getting both types of insurance would probably make sense.

anoop
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Re: flood and earthquake insurance for house

Post by anoop » Thu Apr 05, 2018 5:57 pm

Watty wrote:
Thu Apr 05, 2018 4:10 pm
anoop wrote:
Thu Apr 05, 2018 1:01 am
Watty wrote: ↑Wed Apr 04, 2018 11:21 pm
What is the house worth?
Would that change whether or not I should get either insurance?
Yes, The policies you mentioned would cost about $75 a month. If it is a million+ dollar house then that is basically meaningless compared to the other costs of home ownership. If it costs a lot less then the insurance cost might be more of a factor.
anoop wrote:
Thu Apr 05, 2018 1:01 am
I am in Roseville in the Sacramento area.


I am only vaguely familiar with that area but isn't a lot of the Sacramento area considered delta area? If so that that could not only be bad for floors but a huge factor in earthquakes is the soil type and silty areas can have earthquake liquefaction (google this).

If you are not on a rocky hillside then getting both types of insurance would probably make sense.
In that respect, the cost of the policy is not much at all. The entire house policy including flood and earthquake will cost less than my car insurance. So it's not really going to create much of dent financially, just that I don't want to buy more insurance than is needed.

I am on a rocky (everything is rocks around here, so they don't dig very much when putting concrete/pavers in backyards) hill, albeit a very small one. Sacramento is in delta area, but I'm in Roseville which is at a slightly higher elevation and not at all prone to flooding.

Since starting this thread, I spoke to one neighbor and they have neither.

However, reading various responses, it sounds like it's probably not a slam dunk in terms of deciding one way or another. The worry wart in me wants to go ahead and just get it, but I wanted to make sure I wasn't just throwing the money away.

denovo
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Re: flood and earthquake insurance for house

Post by denovo » Thu Apr 05, 2018 6:14 pm

Watty wrote:
Wed Apr 04, 2018 10:21 pm
anoop wrote:
Wed Apr 04, 2018 1:14 pm
If I add earthquake ($300) and flood insurance ($450), it will more than double my annual premium.
What is the house worth?

I have moved since then and when we were looking for a house we made sure that there was no chance of any house that we would buy could flood so we did do not have flood insurance now.

We do have earthquake insurance because we are in the southeast which has more earthquake risk than you might expect. Normal home insurance usually excludes all sorts of earth movement which includes things like landslides and slumping which is another good reason to get earthquake insurance since it should cover that.

https://earthquake.usgs.gov/hazards/learn/

Image
Personally, I wouldn't buy earthquake insurance unless a home was in the shade of red. Plus damage in here was not well-defined. If some china or a tv breaks, big deal, you don't insurance for that. You want it for structural damage. 6.5 or higher is the kind of earthquake that can cause that kind of damage.

https://en.wikipedia.org/wiki/List_of_e ... ted_States

I only count one earthquake over 6.5 not in the Western United States; and this is going back to 1700.
"Don't trust everything you read on the Internet"- Abraham Lincoln

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Watty
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Re: flood and earthquake insurance for house

Post by Watty » Thu Apr 05, 2018 7:06 pm

anoop wrote:
Thu Apr 05, 2018 5:57 pm
However, reading various responses, it sounds like it's probably not a slam dunk in terms of deciding one way or another. The worry wart in me wants to go ahead and just get it, but I wanted to make sure I wasn't just throwing the money away.
Your local city or county likely has a lot of the risk information available for your specific area. It might be good to check their websites or to go in and talk with them.

anoop
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Re: flood and earthquake insurance for house

Post by anoop » Thu Apr 05, 2018 8:00 pm

denovo wrote:
Thu Apr 05, 2018 6:14 pm
Personally, I wouldn't buy earthquake insurance unless a home was in the shade of red. Plus damage in here was not well-defined. If some china or a tv breaks, big deal, you don't insurance for that. You want it for structural damage. 6.5 or higher is the kind of earthquake that can cause that kind of damage.

https://en.wikipedia.org/wiki/List_of_e ... ted_States

I only count one earthquake over 6.5 not in the Western United States; and this is going back to 1700.
Insurance kicks in only if damage exceeds 10% of dwelling cost. So this really is about a catastrophe and, at just under $300/yr, it is priced as such. It would be MUCH more expensive, perhaps prohibitively so, if the house were in a seismically active area.

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