Divided Opinions Over Value Of Earthquake Insurance
By Robert Digitale, The Press Democrat, Santa Rosa, Calif. | |
McClatchy-Tribune Information Services |
The uninitiated responded, "Well, you're lucky." The more knowledgeable said, "I hope you didn't hit your deductible."
Fuller, a public relations consultant, said the repairs from last month's magnitude-6.0 quake won't come close to his
Even so, his insurance policy still gives him peace of mind that he could rebuild should a massive, 1906-type quake ever level his city.
If needed, Fuller said, "I could afford a
Fuller is a rare breed among Napans, whose city last month suffered one death and an estimated
Only 9 percent of state businesses had quake insurance last year, according to the state
The number of residential policies has declined statewide from 1.2 million in 2004 to 1.1 million last year. But with pending changes, more homeowners may begin to consider the coverage.
Even so, earthquake insurance elicits head-jarring differences of opinion among Californians.
Insurance experts say the lack of coverage means that homeowners, businesses and the state as a whole are going to suffer terrible financial harm when a major quake strikes. They consider earthquake coverage similar to other insurance offerings for life, health and automobiles. And they say that other countries take a more sensible approach to managing the risk of catastrophic quakes.
Many homeowners counter that quake insurance is too expensive and the deductibles are too high.
"The premium cost is so prohibitive that it makes no financial sense," said
Jensen, manager of
Jensen's own baby blue and white home soon will have a new chimney, and she plans to have a structural engineer look over cracking and slight twisting at its front and back walls. So far the damage amounts to about
Despite the losses, she remains uninterested in earthquake insurance. If she had bought such coverage, she said, the deductible level would have been
"So what good is it?" she asked.
Another quake coming?
As the
In the 1906 quake, at least 100 people perished here, while the city's domed courthouse and many downtown structures collapsed. As well, the wreckage from a pair of 5.6 and 5.7 quakes in 1969 led to the remaking of the downtown, including the construction of a modern shopping center atop six blocks of former hotels, theaters and other businesses.
Looking forward, the state has more than a 99 percent chance of experiencing a magnitude 6.7 quake or larger by 2038, the
In
While
That quake killed about 60 people and caused
Insurance companies paid
The fact that nine out of 10 California homes now lack earthquake insurance is "alarming," Pomeroy said. His agency is working to offer homeowners new policies "considered to be much more affordable and much more valuable."
'Not ready for anything'
Should a major quake devastate a city, many
"At this moment, we're not ready for anything," she said. The state could learn lessons from the success of such countries as
As with homeowners, fewer state businesses have earthquake insurance today. The number declined last year to almost 84,000 from 119,000 in 2004.
Larger companies are much more apt than smaller ones to buy the coverage, said
Evaluating insurance need
In recent years, premiums have become more expensive, and many smaller businesses have decided to go without coverage, Michon said. They're essentially saying if a big quake hits, "we're just going to take a bath on it."
Earthquake premiums and coverage are "on par" with those offered for homeowners who risk damage from hurricanes and tornadoes, said
Bach recommends homeowners evaluate the need for quake insurance by considering the style and age of their homes, their compliance with modern building codes, the amount of equity in the properties and their distance from known fault zones.
For the owner of a modern, single-level, ranch-style home in
Don't presume your home is safe because it survived the 1989 Loma Prieta earthquake, Bach said. That reminds her of the people on
Earthquake insurance is meant to protect against a catastrophic event, much like health insurance does for a needed major surgery. "It's those dollars that the average person could not come up with on their own," Bach said. "It's worst-case scenario protection."
Bach and others cautioned against expecting the government to bail out homeowners. As of Friday,
More coverage options now
More insurance companies in
The authority recently asked the
It also sought permission to raise the premium's discount for those who adequately retrofit homes. That discount now is set at 5 percent, but could go to as much as 20 percent, Pomeroy said.
Another effort seeks to win federal assistance to greatly reduce the more than
"It does tend to put this back on people's radar screens," Pomeroy said. "And it usually shows up in increased policies."
In
"It's on top of people's minds," he said.
Such coverage is just part of the answer to preparing your family, home and community for a major disaster, Cardinale said. But if a 7.0 quake damages your home, "you're going to thank God you bought earthquake insurance."
You can reach Staff Writer
___
(c)2014 The Press Democrat (Santa Rosa, Calif.)
Visit The Press Democrat (Santa Rosa, Calif.) at www.pressdemocrat.com
Distributed by MCT Information Services
Wordcount: | 1711 |
Sonoma County morgue grapples with backlog, long delays
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News