Do you carry earthquake insurance?

Johnny_IHB

Johnny_IHB

New member
Do you guys purchase earthquake insurance.? I know some said earthquake insurance are totally useless because when the big one hits the insurance company will simply go broke.
 
[quote author="Sideliner" date=1208422401]Do you guys purchase earthquake insurance.? I know some said earthquake insurance are totally useless because when the big one hits the insurance company will simply go broke.</blockquote>
The "Big One" may or may not occur in your area. It may or may not destroy your house, yet leave the other side of town relatively intact. Just make sure your insurance covers everything from fire to water to incidental damage.
 
[quote author="Sideliner" date=1208422401]Do you guys purchase earthquake insurance.? I know some said earthquake insurance are totally useless because when the big one hits the insurance company will simply go broke.</blockquote>


While that would be a possibility, after Northridge people foresaw that and the state legislature created <a href="http://www.earthquakeauthority.com/index.aspx?id=33">the California Earthquake Authority. </a> So you can get insurance from any participating company who isn't a member, or you can get EQ insurance through a CEA member insurer. With CEA, the risks are spread among companies somewhat, although CEA's coverage is limited.
 
I will never own a home in CA without earthquake insurance - I even have it as a renter - primarily I have it for the possibility of being displaced and having to be in a hotel or something after an earthquake. After the northridge quake there were so many buildings and houses that were uninhabitable and closed down for soooo long.....
 
My folks carry Earthquake ins. for the SFR.



I haven't at my property yet, it's a condo though.



You have to remember the Earthqake ins has a huge deductible, $50k or more.



One way of looking at it is, can you afford to protect yourself for every act of god.
 
Structures built before 1933 did not require anchor bolt attachment to the foundation. The 1933 Long Beach Earthquake mandated the seismic requirements for homes built during that era. Bad contractors and cheaters were prolific during the era of 1950-1978. Most of the construction workers without construction knowledge were ex-convicts and school drop-outs. Most homes were badly built.



Eventhough architect and engineering drawings specified shear panels, bolts and straps but installations often were incorrect. As a result these buildings were heavily damaged during the Northridge earthquake. Homes or apartments with excessively wide openings at the garage as well as too many or wide windows are candidates for structural damage. Solid walls measuring 4' wide are best in providing rigidity for lateral seismic movement. Every exterior walls should have some shear walls.



Homes with view often have all windows along the backside and no presence of shear wall. Steel framing is hidden inside the wall as a substitution for shear walls.



Do consider insurance when your home matches the desribed criteria.
 
I lived in Santa Cruz a few miles from the epicenter of the '89 quake and in Agoura Hills at the time of the '94 Northridge quake. We have a house in Paso Robles and now are buying one here in Costa Mesa. We did get EQ on both, even though in the event of damage to the home we would still have to foot a hefty portion of the bill. Insurance is to protect you against a catastrophe that would ruin you. If either of our houses were red flagged, it would be such a signficant set back to us financially that we felt we had to have the insurance.





Although I was surprised at how inexpensive it was in Paso considering that they had a 5.0 a few years back. For some reason though, it wasn't classifed as being on a fault. The Costa Mesa EQ was more than double the Paso. Still, I wouldn't go without it.



The Paso house is on a raised foundation, so we also made sure that all the joints were reinforced and braced well. I think of that as insurance as well because if we invest in something that can potentially prevent the foundation from ruin, we save having to pay the deductible.
 
I was curious about this insurance too. I played around with different zip codes and homes courtesy of Redfin and the <a href="http://www.earthquakeauthority.com/index.aspx?id=33">California Earthquake Authority?s</a> website for numbers.



I used a replacement cost of $150/sq ft and 2500 sq ft as a datum, or $375k remembering that the land value presumably remains unchanged.



I selected a 10% deductible, or $37,500 and > one story. Left defaults on the other options.



For:

> Irvine, age 1977, zip 92603, Turtlerock, annual premium = $338

> Irvine, age 2005, zip 92620, Woodbury, annual premium = $953

> Northridge, age 1961, zip 91325, annual premium = $2261

> Anaheim Hills, age 1973, zip 92807, annual premium = $533

> Anaheim Hills (SW portion), age 1974, zip 92867, annual premium = $1519

> Corona Del Mar, age 1986, zip 92625, annual premium = $1208

> Newport Coast, age 1996, zip 92657, annual premium = $338



The risks and geology are complicated on a micro scale. For someone not familiar with the area, it may behoove one to consult a professional, or really spend the time to learn where the riskier areas are.



On another note, earthquake insurance is not as expensive as I originally thought it would be. Going from a 10% to 15% deductible reduces the premium on average about 35%.
 
What is the short story on why Woodbury is 2-3X thecost of insurance in Turtlerock? It would seem that the brand new homes would be built to ever-stringent standards. I mean, most SFR's in Woodbury have post-tension slabs and tons and tons of foundation bolting. So what gives?
 
Is irvine really close to major fault lines? I know they are everywhere, but what's the likelihood of a total loss of home? Even with minor damage, a 37K deductible would likely exceed some minor stucco and drywall work. But anything foundation/structural related then I guess it'll likely run into the 100K range. But a $338 annual premium seems pretty darn cheap.



I was living in Northridge at the time of the Northridge quake and a lot of the damage, other than apartments collapsing, were masonry work, brick work, retaining walls, chimneys. I remember piles of bricks just sitting in the streets until the city had time to clean it all up.
 
Isn't it interesting that Northridge is so high considering that they didn't even know the fault existed that caused the big quake. Although I suppose the type of land is part of the calculation as well.



I also remember all the bricks laying on the sides of the street in Northridge - made me very, very wary of brick buildings - I remember being in Seattle - which is also 'due' for a big quake and seeing so many huge brick buildings - scary. I knew people who had major structural/foundational type damage and from the outside of the house you wouldn't have even known it. We were not allowed back in the buildings at CSUN for a few months.
 
Movingaround,



I remember the Oviatt Libary in CSUN had installed a huge robotic book retrieval / archival mechanism in the basement that was finished a year before the quake. The damage the quake took on that system was horrible. Imagine tons of books falling down on that robotic equipment. Not to mention the librarians having to reshelve the entire library.
 
wow - I didn't know about the robotic system in the library! My favorite memory is there was a van parked on one of the internal CSUN streets that had a handwritten sign in the window that said "Geography Department" - I took a picture of that.
 
I lived in Santa Cruz in '89. Some streets had almost every house either red tagged or yellow tagged.... Many of them looked fine from the outside, but their foundations were destroyed and quite a few people didn't have insurance. There was one guy who had closed escrow on a house the day before and the house was totalled and he didn't have insurance. FEMA helps with low interest loans, but still I'd hate to have to replace the foundation. 15% deductible isn't so bad with the FEMA loans if the foundation needs to be replaced.
 
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