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Safeguard your home with quake coverage

August 27, 2014

As officials in Napa, California, and the San Francisco Bay area continue to evaluate the damage in the wake of a recent 6.0 earthquake, homeowners in the area—and all over the state—are left wondering if their insurance plans provide enough coverage.

San Francisco ABC affiliate KGO-TV reported damage from the earthquake could hit $1 billion. The damage cost could rise, according to EQECAT, a company that studies catastrophe risk. Additionally, more than 70 buildings in Napa have been red-tagged, meaning those structures aren't in good enough shape to be inhabitable.

A recent earthquake in California is prompting homeowners to think about quake coverage.
Michael Barry, a spokesman with the Insurance Information Institute, told the San Jose Mercury News that he expects more people to buy quake insurance in the coming months.

“Most definitely,” he said. “I'm sure insurance agents in Northern California will be getting a number of calls inquiring about how to go about buying earthquake insurance.”

Numbers down for quake insurance

Regardless of the known earthquake risks in California, the percentage of homeowners with insurance coverage against earthquake damage has fallen over the past 18 years. The Mercury News reported that one-third of the state's homeowners had quake coverage in 1996, though that number is just 10 percent in 2014.

Experts believe the reason for the plummeting coverage numbers stems from the high cost and belief that the state or federal government will help reimburse damage costs when an earthquake hits.

“It's out of sight, out of mind,” said Glenn Pomeroy, CEO of the California Earthquake Authority. “A lot of people just fail to realize it could happen to them.”

Pomeroy said this happens because up until the 6.0 earthquake in Napa, a major quake hadn't been felt in California for some time. Less than 6 percent of homeowners in Napa had insurance coverage, according to the California Earthquake Authority. In San Francisco County, the rate of quake coverage is 9.4 percent. In San Mateo County, 10.8 percent of all homeowners have purchased quake coverage.

The cost of quake coverage isn't cheap

Homeowners looking to add an earthquake policy to their home insurance plan should be prepared to dole out some extra cash each month. The Mercury News reported the annual cost of earthquake premiums throughout California is $798, although the cost differs when the policy comes with a standard 15 percent deductible or 10 percent deductible.

“If they make a decision to not purchase earthquake insurance, they will be on the hook themselves for what may be their most valuable asset and will be responsible for 100 percent of the cost if a damaging earthquake struck,” Pomeroy said.

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What to do after an earthquake

KGO-TV reported there is a 25 percent chance another large quake will hit Northern California in the next seven days. Another 25 to 60 aftershocks are expected to reach the area. More than 140 aftershocks have already been reported.

As a result the recent disaster, there are a few safety precautions to abide by:

  • Residents who live near an earthquake should check for any damage to the foundation, walls or chimneys of their homes. Utilities and gas lines should also be examined to make sure there is no structural damage.
  • If the shaking starts again, the best way for homeowners to protect themselves is by staying away from windows and taking cover in a door frame. For those who find themselves outside during a quake, keep clear of buildings, bridges, signs and overhead wires.