Do you have earthquake insurance? (San Jose, Hayward: apartments, hotels, houses)

[sav858]

Just wondering if anyone opted to have earthquake insurance on their home? We are about to close on a house and figured we should get it but I was reading only 12% of Californian's have it. The home is in Concord and the seismic risk from the San Andreas and Hayward faults is only moderate, it's mainly just the small, unknown Concord fault that can cause serious damage.

It basically doubles our total cost for home insurance but is still just under $100 a month. Deductible is around $30K I think. It just doesn't seem right not to have it but at the same time the deductible might be what it costs to fix the house anyways.

If you don't have it why did you choose against getting it?

[Bisaro TMF]

Earthquake insurance is a waste of money. The deductibles are so high it makes it not worth it. That is why hardly anybody has it. The chance you'll have more than a few grand in damage, IF THAT, is extremely rare. You actually have a good deductible most are over 60K

[jbunniii]

Yes, I have earthquake insurance. My rationale is simple: if my house gets damaged badly enough to be uninhabitable, my losses are limited to $60k instead of $400k+. That's the difference between a recoverable financial blow (retiring a year or two later than expected) versus unrecoverable (never being able to retire). At $1500/year or so, it's relatively cheap peace of mind.

The previous poster misses the point; the reason the insurance is relatively cheap is because it is only intended to cover a catastrophic loss, not the "normal" sort of earthquake damage (thousands of dollars as opposed to hundreds of thousands) that almost everyone in the region will incur if there is a big quake. A catastrophic loss may be fairly unlikely, but that won't be any consolation if it happens to you.

[Bisaro TMF]

Originally Posted by jbunniii

Yes, I have earthquake insurance. My rationale is simple: if my house gets damaged badly enough to be uninhabitable, my losses are limited to $60k instead of $400k+. That's the difference between a recoverable financial blow (retiring a year or two later than expected) versus unrecoverable (never being able to retire). At $1500/year or so, it's relatively cheap peace of mind.

The previous poster misses the point; the reason the insurance is relatively cheap is because it is only intended to cover a catastrophic loss, not the "normal" sort of earthquake damage (thousands of dollars as opposed to hundreds of thousands) that almost everyone in the region will incur if there is a big quake. A catastrophic loss may be fairly unlikely, but that won't be any consolation if it happens to you.

Who has 60K+ laying around for a deductible? if a quake is bad enough to destroy your house then most likely you won't live anyway. I can see if you live in SF and have the possibility of what happened in the Marina during the Loma Prieta , I see you're in San Jose. Waste of money IMO.

[Ceece]

No. Family members, including me, have worked for insurance companies that sell home/auto and have a good grasp of how it works and have opted not to get the earthquake coverage. It's just a risk we are personally willing to take.

[NoMoreSnowForMe]

Yes. When I owned homes in CA, I always carried it. And now as a renter, I carry it with my renter's insurance.

I don't carry flood insurance, however, because the extra cost isn't worth it to me. I live in a tsunami zone, on the first floor ha ha. but, the cost vs. the value of my things isn't worth it. However, when I lived near a river that flooded in WA state, I definitely carried flood insurance there, as the value of my home vs. the cost was definitely worth it. Ironically, after I divorced my husband who kept that house - it flooded the next year.

You may never need it. But if you ever do, you'll be glad you had it.

[beb0p]

Originally Posted by Bisaro TMF

Who has 60K+ laying around for a deductible? if a quake is bad enough to destroy your house then most likely you won't live anyway. I can see if you live in SF and have the possibility of what happened in the Marina during the Loma Prieta , I see you're in San Jose. Waste of money IMO.

Actually you got it backwards. Many houses are designed to absorb the blunt of the force to shield the inhabitants from said force. In an "ideal" situation, the house would be badly damaged to the point of near crumble, but the residents can walk away with only minor scratches.
.

[jk88cal]

I have earthquake insurance. It depends on your viewpoint. Do you see insurance as a way to "make money". Or do you see insurance as risk mitigiation.

To me, earthquake insurance is like life insurance, pure risk mitigation. I hope to never use it. Chances of me using it is close to zero (again I hope). But if something catastrophic happens, my finances will not be severely affected. I am not concerned with house collapsing or getting injured. But damage to foundation is possible. And that can easily cost $50k-100k+ for repairs. Then another $5000 per months for replacement living accommodations (or $$$ in lost rent) while it is not not livable and being repaired.

If you want to get earthquake insurance, get CEA policy thru your participating insurance company. Earthquake policy from independent insurance company is extremely expensive. CEA cost is reasonable, but not cheap.

[Bisaro TMF]

Originally Posted by beb0p

Actually you got it backwards. Many houses are designed to absorb the blunt of the force to shield the inhabitants from said force. In an "ideal" situation, the house would be badly damaged to the point of near crumble, but the residents can walk away with only minor scratches.
.

My point was if an earthquake is strong enough to destroy a single family house it will be a world record quake. Something would probably fall on you killing you. A tree, building, something. Our house made it through a 6.9 with no structural damage at all. What would have to happen to make an Earthquake crumble a house or mess up the foundation? a 10.5? My questions is what happens if you don't have enough for the deductable?

[capoeira]

Originally Posted by Bisaro TMF

Our house made it through a 6.9 with no structural damage at all.

Irrelevant unless you lived in Santa Cruz or Watsonville in 1989.

Housing Repair and Reconstruction After Loma Prieta

"The greatest concentrated loss of commercial and residential buildings was in the Pacific Garden Mall area of the City of Santa Cruz, a seaside community and university town of 48,000. In addition to the loss ofapproximately 25 commercial structures, four residential hotels with approximately 400 units were lost.

Numerous single-family residences and small apartments were rendered unoccupiable and throughout the county, something on the order of 10,000 housing units incurred moderate damage (Santa Cruz County, 1989).

Watsonville sustained the greatest single-family housing loss. Some 850 housing units (10% of the city's housing stock) was severely damaged or destroyed. These were small wood frame houses and apartment buildings literally knocked off their foundations;."