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.
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