Earthquake insurance??

[ailsagirl]

I was wondering if I ought to take out earthquake insurance. I live in the SF Bay Area. How are you Californian DU-ers dealing with this? I've read it's absolutely necessary and I've read it's not really.

Opinions?

[Bernardo de La Paz]

1. Homeowner or renter?

The fundamental question is ... can you carry a total loss? If you have a mortgage and can't pay it off while renting elsewhere, a quake could ruin you. Most mortgages insist on insurance. Check with your mortgage broker and read the fine print.

If you are a renter and can buy $5,000 to 15,000 worth of possessions to get re-established (maybe including a cheap used car), then maybe bank / invest the insurance fee. Park your car away from structures.

Insurance is betting against yourself, so use it to avoid having your life flattened. If you can stand up from a total loss and carry on in a way you find acceptable, maybe somewhat pinched, then consider avoiding it. Easier when renting.

What do insurance companies do with the fees? They invest it. Consider that as an alternative, self-insuring. Takes quite a while to build up a substantial backstop, but it might be the way to go.

[Juneboarder]

8. Most mortgages DO NOT insist on insurance.

Earthquake insurance is not a requirement for any mortgage company that lends on conventional, FHA/VA, FNMA, etc. I do know that there are some proprietary mortgage lenders (jumbo loans) that may require it, but in my history of being in the mortgage industry, I only know of one that used to require it, but with much pushback from brokers and borrowers, they removed their requirement.

[Sessuch]

2. Check first to see if your house is bolted to the foundation

if not. Get insurance then get the house bolted to the foundation.

[ailsagirl]

3. Thank you-- I'll check that out

[Buddyzbuddy]

4. The policy is not cheap but the deductible is the big deterrent.

We last had it about 15 years ago and if we needed to make a claim we would have been required to pay the first $10k out of pocket. Now I'm sure it's much higher and with FEMA out of the picture, you'll need at least that much cash on hand. If a quake results in fire damage your homeowners should cover it minus your deductible.

[ailsagirl]

5. Of course he did

Anything that helps people is summarily trashed.


But thanks for your input

[Auggie]

6. Instead of/in addition to insurance you can retrofit, though FEMA recently cut retrofit funds

We got such a grant a few years ago and shaved a few thousand dollars on strengthening the crawlspace under our California Ranch. It was already bolted to the foundation; this process strengthened the posts and beams supporting the frame.

If you live in an older home with a soft story (like a parking garage, storage or commercial space), retrofitting and/or insurance could make a lot of sense. Earthquakes can cause soft storys to collapse, as witnessed in the 1989 Loma Prieta earthquake. It didn't help that the San Francisco structures in the Marina district, built literally on Bay mud, were liquified by the ground movement.

So the land the structure sits on is important too. Our soft story apartment building at the time of the '89 quake, on San Francisco's Russian Hill, was built on bedrock. We had a few hairline cracks in the plaster walls, but that was it.

$30 million in grant funding slated for seismic retrofits were cancelled, part of the $3 billion in BRIC grants (Building Resilient Infrastructure and Communities) created under the Biden administration. I imagine a lot of this money would have helped homeowners in areas prone to flood, tornado and hurricane damage too.

I don't have earthquake insurance. Hoping I can make through another 10-12 years, after which I sell the property.

[ailsagirl]

7. Thanks for posting, Auggie!

Lots of good information

[beaglelover]

9. Until I moved to the Coachella Valley in 2023, I never had earthquake insurace.

My former home was almost 100 years old and had been through some pretty major shakers in L.A. in its lifetime. I just didn't think that earthquake insurance was worth it.

With the new house, we're SO close to the San Andreas fault that I definitely feel that earthquake insurance is worth the price.

[Emile]

10. I have earthquake insurance and I live in Indiana.

We had a 5.2 magnitude earthquake in 1987, and that's when we found out our home insurance does not cover earthquake damage. I'm sure the insurance is probably cheaper here than in California, but if you can afford it, I would buy it.