Bay Area Residents Reassess Cost Of Earthquake Insurance

SAN FRANCISCO (KCBS)- After Japan’s 8.9 earthquake on Friday, Bay Area residents are naturally checking their earthquake insurance policy, but the reality is only about 10 percent of homes in California are covered.

Even though most residents in the Bay live within 30 miles of a major fault line, cost is a major factor as to why your homeowner’s insurance company doesn’t offer earthquake insurance.

KCBS’ Janice Wright Reports:

Glenn Pomeroy, CEO of the California Earthquake Authority (CEA) said after the Loma Prieta, and the Northridge quakes, insurance companies took stock of the situation in California and decided they didn’t want to write earthquake insurance information.

“They didn’t like the risk so the state created the CEA basically as a non-profit insurance company,” said Pomeroy who claimed with 800,000 homes insured, to be the largest earthquake insurance writer in the country.

Pomeroy maintained that because earthquake damage can be so devastating, that would be all the more reason to make such an investment. But when you put it on paper, to insure a $400,000 home, it would cost about $800 a year.

In some cases it can cost even more than the underlying homeowner’s policy.

However, Pomeroy said they’re doing their best to bring the cost down with a proposed rate decrease, and trying to bring the deductable down at a time when many homeowners can’t even make their mortgage.

(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

Comments

One Comment

  1. albert says:

    The reason I never got is the deductable you would have to pay to get your house rebuilt. I really don’t have 40 G in the bank for that. Plus the fact that that\s all they would replace,. not personal items

  2. eastbaymom says:

    There seems to be a personal property coverage option now. If I can afford it I’m getting it, but then again, the Hayward Fault does run right through my block.

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