Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Earthquake Insurance
Old 04-28-2008, 07:29 PM   #1
Full time employment: Posting here.
 
Join Date: Sep 2004
Posts: 607
Earthquake Insurance

Well, it's that time again. My renewal for earthquake insurance came in the mail and I'm debating whether to renew it or not to bother. The premium is pretty low, about $400/yr, but the deductible is in the order of 15-20%. Here's some more info and my thought process in making the decision:

1. Less than 20% of Californian homeowners carry earthquake insurance
2. Apart from a quasi-state earthquake organization (California Earthquake Authority), there's only one company, GeoVera that offers it. They seem to be strong financially, but in the case of the big-one, who knows?!
3. I hear that most earthquake damage is going to be below the deductible since most of the value is in the land.
4. Some people seem to be relying on FEMA to bail them out if the big one hits. Even ignoring the Katrina debacle, this doesn't seem wise.
5. Our loan-to-value is about 22%, so we're pretty close to paying off the house (give or take 5 yrs).
6. There is a school of thought that says that the insurers have figured out where the major damage would be after an earthquake since everyone knows where the faults are.

I believe I asked this same question a few years back and ended up renewing it mostly out of default. Any advice is greatly appreciated!
__________________

__________________
WanderALot is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-28-2008, 07:38 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
We just got it for our place in California . Like 200 or so the for year. Probably will never happen...yabut.
__________________

__________________
Notmuchlonger is offline   Reply With Quote
Old 04-28-2008, 07:44 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Unless you're sitting right on top of a fault line or close to one, the odds of earthquake damage exceeding the deductible is pretty low.

If you dont have a masonry chimney and your house is bolted to the foundation, the odds are ridiculously low.

Even a lot of the older homes near northridge and santa cruz without masonry chimneys only had minor damage.

I had one poor SOB co-worker. He got relocated from LA up to Sacramento, put his house up for sale down there and just couldnt sell it. Then northridge hit, his house was right on top of one of the smaller faults and got wrecked. No earthquake insurance. So he had to pay out of pocket to fix it, then of course nobody wanted to buy a house in the area. I think he sat on it for 2 years before he finally got a buyer.

If you live in CA near the Hayward fault, I'd buy a couple of policies...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 04-28-2008, 07:59 PM   #4
Moderator Emeritus
Khan's Avatar
 
Join Date: Aug 2006
Location: Pine Island, Florida
Posts: 6,868
Send a message via AIM to Khan
I have earthquake insurance in Ohio, about $30/year, do have a masonry chimney.
__________________
"Knowin' no one nowhere's gonna miss us when we're gone..."
Khan is offline   Reply With Quote
Old 04-28-2008, 09:11 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
Live in Pasadena, had some small quake damage a couple times but not worth the insurance. As our house is old (pre 1933 standards) we paid to have the foundation bolted. That will probably help the house but its even more important for safety.

yakers, writing this from a Habitat for Humanity site in Biloxi and is glad he will never have to deal with a huricane/flood at home.
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 04-29-2008, 08:52 AM   #6
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,579
I bought it for our house, I don't know what the premium is, but in West Virginia it's cheap. Doing it was a kind of "covering all the bases" type thing.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is offline   Reply With Quote
Old 04-29-2008, 10:14 AM   #7
Recycles dryer sheets
 
Join Date: Feb 2007
Posts: 120
If my memory serves me, there was an article in the Seattle Times a year or so ago that touched on this topic. I did a search search on the ST site, but wasn't able to find the article. My recollection is that the article interviewed a bunch of people (including geologists) on the subject of earthquake insurance. Most interviewees felt that it made more sense to spend the money on earthquake upgrades to one's house, for example, fastening the frame to the foundation. About the only dissenters to this view were insurance salesmen.
__________________
Dudester is offline   Reply With Quote
Old 04-29-2008, 11:20 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
For what its worth, my ex girlfriend who works for FEMA doing emergency preparedness for major events lives down in the SF Bay Area and doesnt have earthquake insurance. In the time she's lived there, she'd have spent roughly $6k in insurance with no events to file a claim on.

The comment about spending the money on making upgrades to your property to minimize damage is well taken. A few thousand bucks can make your home highly resistant to earthquake damage.

That $6k would be more than enough to do some foundation bolting, cripple wall reinforcements, chimney reinforcements, and replacing a few old windows that arent tempered.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 04-29-2008, 01:32 PM   #9
Recycles dryer sheets
 
Join Date: Sep 2007
Location: near L.A.
Posts: 173
Quote:
Originally Posted by cute fuzzy bunny View Post

That $6k would be more than enough to do some foundation bolting, cripple wall reinforcements, chimney reinforcements, and replacing a few old windows that arent tempered.
don't mean to hijack the thread, but can anyone provide some pointers/resources on what I can do to reinforce my house. It was built in the 1940's, and in CA. No chimneys, no earthquake ins.

thanks.
__________________
ER_Hopeful is offline   Reply With Quote
Old 04-29-2008, 03:09 PM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,201
We've always decided to have it.

EarthquakeIns.jpg

You can get a map from some government agency (let me know if you can't find it) that shows the expected danger from an earthquake for your exact area. That is, based not only on faults, but the nature of the soil.
__________________
Al
TromboneAl is offline   Reply With Quote
Old 04-29-2008, 03:34 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Al, I think your biggest concern will be from the tsunami created by the offshore earthquake.

About 45,000 Van's gift baskets might provide a safe seawall.

Quote:
Originally Posted by ER_Hopeful View Post
don't mean to hijack the thread, but can anyone provide some pointers/resources on what I can do to reinforce my house. It was built in the 1940's, and in CA. No chimneys, no earthquake ins.
Cal-Quake.com: Earthquake Retrofitting Information for Home Construction

These guys hit up the major items. One of the biggest that I didnt see them list is glass. A ridiculous percentage of homes built in CA have windows...some of them pretty large...that arent safety/tempered. I've seen quite a few home inspections involving people who have huge 2 story window-walls floor to ceiling where the builder or homeowner decided to save a few bucks and use regular glass and the building permit inspectors didnt pick it up.

I'm thinking in a good shaker your biggest problem wont be your chimney separating or your house hopping off the foundation. It'll be a thousand pounds of glass shards raining down into your living room.

Even the small regular sliders if they're old non tempered single pane windows could get pretty exciting.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 04-29-2008, 03:36 PM   #12
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by ER_Hopeful View Post
don't mean to hijack the thread, but can anyone provide some pointers/resources on what I can do to reinforce my house. It was built in the 1940's, and in CA. No chimneys, no earthquake ins.
Don't know where you are in California, but Google "earthquake seismic refrofit contractor" (and your city/area) and you may find some information and leads.

Some things are minor things you can probably do (like bolting and strapping the water heater to the framing), but others might be more difficult like getting under crawl spaces and securing foundations and stuff.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
The problem
Old 04-29-2008, 09:33 PM   #13
Recycles dryer sheets
aenlighten's Avatar
 
Join Date: Apr 2007
Posts: 275
The problem

is not only the high deductible, and a 15-20% deductible when the structure is only 30-40% of the value or less is hardly anything, but also that it covers next to nothing on contents or out of home living expenses. If you are high risk it is doubtful you could get it, and if you aren't it is doubtful it will be of any value. It is not surprising most Californians feel the same.
__________________
aenlighten is offline   Reply With Quote
Old 04-30-2008, 01:45 PM   #14
Full time employment: Posting here.
 
Join Date: Sep 2004
Posts: 607
Thanks everyone for all the suggestions. Still hemming and hawing about it. I did a little bit more research that found out that my policy is a "comprehensive policy", meaning that it covers a lot of the contents of the house and living expenses for 12 months. The more basic catastrophic policy (equivalent to the California Earthquake Authority policy) is about $100 cheaper.

Our house is a mid 80s tract house built on slab so this is more susceptible (according to a website) to high $$$ damage during a big earthquake.

T-Al, I would like to see a link for expected danger in a particular area. I checked a California Geological website and they had fault locations for Southern California. The closest fault is about 10 miles away (Newport-Inglewood fault).

For those interested, here's link with more info on earthquake insurance with lots of links:

Tips for Buying Insurance
__________________
WanderALot is offline   Reply With Quote
Old 04-30-2008, 02:09 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Quote:
Originally Posted by WanderALot View Post
Our house is a mid 80s tract house built on slab so this is more susceptible (according to a website) to high $$$ damage during a big earthquake.
Hmm, which web site...because a slab on grade should be your best bet for minimal earthquake damage.

Is it two story or one story, and is it more or less square/rectangular or does it have a lot of overhangs/build outs, is the garage part of the house or under some of the rooms, and is there a brick fireplace?

If you're on a slab, single story, fairly rectangular house with no buildouts, and you dont have a garage under some rooms with a post support system...ten miles from the nearest fault...pretty unlikely you'll have a problem.

Plus your mid 80's construction included a lot of the modern earthquake resistant building codes.

Only thing I could think of regarding slabs is if the house is pretty old and they didnt bolt the footings to the slab, theres no way to easily do a retrofit without cutting into the walls. With a raised foundation you can bolt and reinforce posts using the crawlspace.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 04-30-2008, 03:13 PM   #16
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 398
Quote:
Originally Posted by TromboneAl View Post
You can get a map from some government agency (let me know if you can't find it) that shows the expected danger from an earthquake for your exact area. That is, based not only on faults, but the nature of the soil.
There are many factors influencing the amplitude and duration of shaking during an earthquake. Some of these factors are predictable, while others depend on the specific characteristics of a given earthquake.

While distance from the ruptured fault is important, it is not necessarily the driving factor. Soil and general geologic conditions can be quite significant. Think of the 1989 Loma Prieta earthquake (M6.9) in northern California. Some of the most severe shaking occurred in the San Francisco Marina district even though it was 50-100 km from the rupture zone. This was due to the underlying sedimentary fill. Also, consider the collapse of the Nimitz freeway in Oakland, also nearly 100 km from the fault. In part, this was due to higher amplitude ground motions caused by a "Moho bounce" (seismic energy focused back to the surface after reflecting off the boundary between the Earth's crust and mantle).

A phenomenon known as "directivity" is extremely important. Directivity is associated with the direction of fault rupture and is not very predictable. For example, even though the epicenter of the 1906 San Francisco earthquake (M7.9) that occurred on the San Andreas fault was only a few kilometers from downtown San Francisco, ground shaking in the city itself was actually relatively modest. A much more devastating event would occur if a similar magnitude earthquake were to originate (epicenter) on the northern San Andreas (200 km to the northwest), with a rupture direction (directivity) pointed towards the San Francisco area.
__________________
Shawn is offline   Reply With Quote
Old 04-30-2008, 04:13 PM   #17
Full time employment: Posting here.
 
Join Date: Sep 2004
Posts: 607
Quote:
Originally Posted by cute fuzzy bunny View Post
Hmm, which web site...because a slab on grade should be your best bet for minimal earthquake damage.
I read so many websites that I'm not sure I can find it now.

Quote:
Is it two story or one story, and is it more or less square/rectangular or does it have a lot of overhangs/build outs, is the garage part of the house or under some of the rooms, and is there a brick fireplace?
It's two story, pretty boring rectangular house. About the only nice thing is that it has a living room with nice high ceilings. The garage is underneath the master bedroom. There's a fireplace, but it isn't brick.

Thanks.
__________________
WanderALot is offline   Reply With Quote
Old 04-30-2008, 04:46 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,201
Quote:
T-Al, I would like to see a link for expected danger in a particular area. I checked a California Geological website and they had fault locations for Southern California. The closest fault is about 10 miles away (Newport-Inglewood fault).
What I have is a publication from the time before the government had discovered the Internet. It's Special Publication 115 from 1995, from the dept of conservation, division of mines and geology. It's called Planning Scenario in Humboldt and Del Norte Counties for a great earthquake on the cascadia subduction zone.

Hopefully you can find something similar for your area.
__________________
Al
TromboneAl is offline   Reply With Quote
Old 04-30-2008, 04:47 PM   #19
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
TromboneAl's Avatar
 
Join Date: Jun 2006
Posts: 11,201
Quote:
The garage is underneath the master bedroom.
Off topic, but we have the same arrangement -- how's the noise level in your bedroom when the garage door opens?
__________________
Al
TromboneAl is offline   Reply With Quote
Old 04-30-2008, 05:16 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
The bedroom over our garage is my office, and man the garage door opener is loud. Even the belt drive one. I think its a lot louder in my office than when you're standing in the garage.
__________________

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
California Earthquake Insurance Premium Increase TromboneAl Other topics 10 06-01-2007 11:07 AM
Earthquake Risk wabmester Other topics 26 02-06-2007 03:12 PM
Surf's Up! - Earthquake - Hawaii - 6.3 Danny Other topics 24 11-26-2006 01:25 PM
Earthquake? OldAgePensioner Other topics 15 06-15-2006 10:23 PM
California Earthquake Insurance WanderALot Other topics 5 03-10-2006 01:32 PM

 

 
All times are GMT -6. The time now is 07:40 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.