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Old 04-24-2008, 08:27 AM
 
109 posts, read 255,415 times
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Default Should renters have earthquake insurance?

Okay, I've got my new place in San Diego rented, I'm moving out this weekend (wheee!!!) and now I'm laying down the logistics. I noticed that renter's insurance doesn't cover earthquakes. Is it worth it for me to pay another $120 a year for earthquake coverage?
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Old 04-24-2008, 09:12 AM
 
Location: San Diego
5,262 posts, read 4,201,496 times
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I don't think it is worth it for most renters to carry earthquake insurance. If the building is destroyed, the owner of the building is the one who takes the loss, not the renter. So the owner needs to carry insurance to cover property damage.

If your personal possessions are valuable, what is the probability of their being completely destroyed if an earthquake were to occur?

Clothes and jewelry would not likely suffer damage. Electronics might.

Then there is the deductible. If yours is $500, and the only thing that gets damaged is a $600 TV, then your coverage would only pay $100 to have it replaced. You would have to pay the other $500 out of pocket.

So you need to decide if it is worth the risk of not having insurance based on the value and type of possessions you own. It's really a personal choice.
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Old 04-24-2008, 10:45 AM
 
Location: Mission Valley (soon Mira Mesa)
30 posts, read 148,964 times
Reputation: 26
Consider flood insurance instead, as fires and earthquakes usually come with flooding, and that's not typically covered in your standard agreement.
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Old 04-24-2008, 11:01 AM
 
Location: SF Bay Area
10,129 posts, read 12,666,095 times
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Although experts say a big quake is possible in San Diego, there has never been a major devastating quake with loss of life in the history of this city, at least since people have been here. We're much pretty far from the San Andreas fault and do not have as high of a risk from quakes as SF or LA. It's not much money really over the course of a year but I don't really think it's that necessary.
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Old 04-24-2008, 01:42 PM
 
Location: North of the hood, south of the valley
2,915 posts, read 6,320,993 times
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Sound advice from RD laying out the cost/benefit of earthquake insurance.

Sav858 and I are on the same wavelength about the risks of a large quake in San Diego which are historically low.

As for flood insurance, that would be needed in only a very, very few areas.
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Old 04-24-2008, 03:26 PM
 
Location: Mission Valley (soon Mira Mesa)
30 posts, read 148,964 times
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Well, don't forget with fires (including those started by earthquakes), your home is going to get flooded with water from firefighters. And if your pipes break in a large earthquake, again flooding. That's what I was getting at.
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Old 04-24-2008, 08:54 PM
 
Location: San Diego > Denver
264 posts, read 920,697 times
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We still can get earthquake damage, even though we don't have a major fault running under us. There are some faults offshore. Check out these articles:

Finding Faults (http://explorations.ucsd.edu/faults/sandiego.html - broken link)

San Diego’s Earthquake Risk (http://www.thesandiegotraveler.com/san-diegos-earthquake-risk - broken link)

All in all, if you own, get earthquake insurance to cover replacing some of the house, and get renters insurance if you rent to cover your belongings. Don't worry, just be prepared. The chances of getting major damage in the San Diego are still fairly small.
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Old 04-26-2008, 03:33 PM
 
Location: San Diego
95 posts, read 249,859 times
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Hey Pizzicato,

Welcome to SD. I'm a Property Field Adjuster and I'm an accredited earthquake adjuster as well, so I think I can answer your question. The short answer is NO, do not spend money on earthquake insurance. The California Earthquake Authority (CEA) Policy is the only policy you can purchase. To begin with, you do not carry a standard deductible, such as $250 or $500 as is with Renters Polices. The CEA policy carries a percentage deductible. In other words, you need a major loss to even make it worth your effort to file a claim as CEA deductibles typically range from $10,000 to $25,000. That's not a typo either.

Secondly, the CEA policy is very restrictive. It doesn't provide coverage for all of your personal property. There are several exclusions, such as collectibles and business equipment.

A large majority of the Renters Policy claims I have worked involve either theft or water damage, with electronics being the most expensive items. Just make sure you have enough coverage for your under your Personal Propery Coverage. Also, do you keep any business related equipment at home? If you do, your Renters Policy will only provide a very small amount of insurance if lost. Computers typically carry sub--limits between $2K and $5K. If you need more insurance for computers, ask your agent to "schedule" them. This typically costs a little more, but it's well worth it. Jewelry carries sub--limits as well, typically between $1000 and $2500. As with electronics, schedule them if you need more coverage.

Someone also mentioned Flood Insurance. Don't waste your effort looking for it because the National Flood Insurance Program (NFIP) doesn't write flood coverage for Renters. Even if you can get it, SD is not in a flood plain making it worthless.

Water related events typically involve plumbing failures. That is not considered a "flood" in the insurance industry and as long as the flooding was a "sudden" event, it will be covered under your renter's policy.

Instead of Earthquake, you should be sure you carry enough Liability Coverage. Consider about $100K limit, at a minimum. Purchase more if you can afford it. You are more likely to be sued than sustain earthquake damage.

Sorry for being so long winded, but I hope I answered your questions. Feel free to ask any other questions.

AJ
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Old 04-26-2008, 03:54 PM
 
Location: Mission Valley (soon Mira Mesa)
30 posts, read 148,964 times
Reputation: 26
My mention of flood insurance was for water damage. I didn't realize they were different things!
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Old 04-27-2008, 01:21 PM
 
Location: San Diego
95 posts, read 249,859 times
Reputation: 124
Quote:
Originally Posted by kwaping View Post
My mention of flood insurance was for water damage. I didn't realize they were different things!
Ya, it's not well known. Most people who carry flood policies live in the Mid West, where floods are a likely peril. Even if you own a flood policy, you can't file a claim until the NFIP declares a "general condition of flooding" in any one area.

No need to spend more on this necessary evil if you don't have to.

AJ
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