Understanding california earthquake insurance

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Understanding california earthquake insurance

Should I get earthquake insurance? Sept I am having a hard time figuring out whether to get earthquake insurance, and if so, from where. The most recent related topics in the archives are from First, should we get earthquake insurance?

I know the risk of an earthquake is very high, but so are the premiums and deductibles! We have had our house bolted to the foundation, reinforced etc.

I am inclined to get it because I am a risk-adverse person, but I would like to understand the value proposition better. Second, if we get earthquake insurance, should we just get it from our the company that provides our basic homeowner insurance State Farm or does it make sense to shop around?

That means that the limits of what the CEA can pay out are its own resources--and when those are exhausted, they will not be able to pay out anything further. So you can stand to benefit a lot if there is a small quake and your home is one of the few damaged, so there are few policies to pay out.

But if ''The Big One'' hits- -and that was really our concern in looking at earthquake insurance in the first place--there will be thousands and thousands of claims, and based on the numbers at the time, I felt that the CEA would not have funds to cover so many catastrophic losses.

Because our home is a single- story house on bedrock and not in a liquefaction zone, we decided the best use of that money was to retrofit it--bolt the foundation, add cripple walls, secure water heater, etc. If we owned a higher risk home that was cost prohibitive to retrofit, we would probably have opted to go the insurance route, though.

Some of the other concerns we had at the time were the very low limits for personal property and loss of use, but some of that may have changed since we got our quotes now that more insurers offer policies. And the math on the CEA's finances may also have changed if they have increased the number of policies issued, too.

Happy to be bolted down! As a fellow risk-averse person, I do have earthquake insurance on our home in Berkeley. My understanding is that all earthquake insurance in California comes from the same source: CEA - California Earthquake Authority, although you may have yours administered through your regular insurance agent such as State Farm.

I don't think there's any markup so it probably doesn't matter who you buy it through, but I could be wrong about this. The insurance is expensive and has a huge deductible. A hayward fault earthquake is likely - and getting more likely in each year.

Here's a graphic showing the probabilities: I believe the estimate for a 7. Many people think that those insurance premium dollars would be better spent on earthquake upgrades to the home - for example, in addition to foundation bolting and cripple wall bracing, you could have your chimney removed, improve the bracing of non-structural elements like shelves and TVs, and prepare your emergency supplies.

A lot of people also question whether CEA will even pay out. The fund will only pay out to the extent that it has enough cash to do so. You have to wonder, in a large bay area earthquake, whether that fund will empty pretty quickly.

Lastly, in the event of a catastrophic earthquake, many people may choose to leave the bay area and not come back. The economy will be disrupted for a long time.

Home prices are likely to drop for a while. You might consider how this factors into your decision. The reason I chose to have the insurance despite these concerns is that I thought about the reality of our lives if our home was destroyed by an earthquake or ensuing fire.

We have an unusual, personal loan covering our mortgage which would make it awkward to go into foreclosure.

And our equity is currently larger than the deductible. If those weren't the case, I don't think I'd have done it.

Good luck, - earthquake believer Earthquake insurance is provided by one agency -- the California Earthquake Authority. You can buy it through your other company, but the rates should be the same anywhere because this agency provides the coverage and determines the premiums, deductibles, etc.

Unfortunately, no matter how well you retrofit, your rates won't change this seems very unfair to me. One thing to be aware of is that even if you have taken retrofitting measures, you still may not be doing all the recommended safeguards.

This was true for us when we hired Dave Ford to come take a look.But according to a new report, on the 25th anniversary of the Oct.

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17, , Loma Prieta earthquake, only 10 percent of California's 7 million plus homeowners have earthquake insurance – and the. Rates for Earthquake insurance can vary significantly. In earthquake-prone areas, the cost of this insurance is relatively high.

Understanding california earthquake insurance

In other areas, it is relatively inexpensive. In California, Earthquake insurance is issued by an independent organization, the California Earthquake Authority (CEA).

CEA policies are available through Trowbridge Insurance. Earthquake insurance on a wood frame home built in Napa after with an insured dwelling value of $, would cost $1, in premiums per year, while the same home built of brick or other material would cost $3, per year, according to the California Earthquake Authority, a publicly managed and privately funded provider of earthquake .

The California Earthquake Authority is a publicly managed, privately funded, not-for-profit organization that provides residential earthquake insurance and encourages Californians to reduce their risk of earthquake damage and loss.

As most Orange County, California homeowners already know, California earthquake insurance is sold separately from regular homeowners’ or renters’ insurance policies.

That’s because, in. The history of CoreLogic® and the California Earthquake Authority (CEA) reaches back to before the CEA began offering earthquake insurance in After the magnitude Northridge earthquake in resulted in heavy insurance losses, the CEA was established.

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