By Julie Watts

SAN FRANCISCO (KPIX 5) — Most Californians live within 30 miles of an active fault. But only about 10 percent of insured homeowners also have earthquake coverage.

The Department of Insurance goes as far as to say it is irresponsible to live in California without earthquake insurance.

A few key things to remember: The government will not rebuild your home, quake damage often requires engineering fixes — which can start at $50,000, and the deductibles may seem high at 10 to 15 percent.

But unlike auto policies, you don’t pay. The insurer just deducts that amount from what they pay you.

And renters, your landlord’s policy will not cover your belongings.

Keep in mind, the majority of damage — and 911 calls — are attributed to stuff inside the home.

But is there enough money in the pot to cover the big one?

Well the California Earthquake Authority says it has $15 billion in reserves.

For perspective, the October fires in wine country resulted in about $9 billion in claims.

Bottom line? Be informed.

Know the soil conditions around your home. You can enter your address on the Cal OES’s My Hazards page.

And consider how close you live to a fault, your type of foundation and construction.

Decide now If you need to mitigate damage with a retrofit, buy earthquake insurance, or both.

Comments (3)
  1. Most people in the Bay Area dont own their homes outright. So the logic is if it falls you just walk away!

  2. Jay Stone says:

    KQED did a report about California earthquake insurance in 2014. The cost for earthquake insurance in San Francisco in 2014 for the average 1,400-1600 square foot home was $2,000 to $5,000 PER YEAR, depending on location in San Francisco and other factors. I don’t know about you, but most households in San Francisco don’t have a spare $2,000 to $5,000 a year for earthquake insurance. Keep in mind this is in addition to what a homeowner is already paying for homeowners’ insurance.

    Home values have risen in San Francisco substantially since 2014, so factor that into the calculations.

    The earthquake insurance deductible is 10% or 15%, and applies to the total limit on the policy for the house, not to the actual loss. The average home price in San Francisco is $1 million, so even if your earthquake loss is partial, you will be hit with a deductible of $100,000 or $150,000 (10% or 15% of $1 million policy limit). How many San Franciscans can absorb a deductible of that magnitude?

    In a major earthquake, not all homes will be affected equally. In the San Francisco earthquake of 1906, estimated at Richter scale 7.8, a majority of the damage suffered was from fire following the quake. Gas and electrical fire potential today is much greater than it was in 1906. Sure, some buildings will suffer direct earthquake damage in part or whole, but fire following the earthquake will again be the major cause of loss to homes. Fire following earthquake IS COVERED on a standard California homeowners’ policy – only direct earthquake damage is excluded.

    Frankly, only the wealthy can afford the cost of earthquake insurance in San Francisco and have the assets to absorb a deductible of that magnitude in the case of loss. Keep in mind some other parts of the Bay Area have an equal or even greater earthquake loss potential, depending on their location in relation to the Hayward fault. Everybody talks about the San Andreas fault, but the Hayward fault is potentially as dangerous or even more so.

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