Bay Area Earthquake..Bay Area Earthquake Monitor
October 14, 2009
Bay Area Earthquake..Bay Area Earthquake Monitor:Bill Clingan was around when the Loma Prieta earthquake sucker-punched the Bay Area 20 years ago.
His Walnut Creek home suffered no damage, which is why he feels comfortable today not having earthquake insurance.
“It’s very expensive. Deductibles are high. It’s just not worth it,” said Clingan, a retiree who worked in the chemical marketing industry. “For what you get it’s not cost effective.”
Not if you ask Girdhar Vander.
“We have it,” said the retired structural engineer of the earthquake insurance policy he purchased for his Walnut Creek townhouse about 10 years ago. “It can happen anytime.”
Happen it did in a huge way when the 6.9 magnitude Loma Prieta earthquake struck the region on Oct. 17, 1989. Since then several smaller temblors have occurred, providing evidence that Bay Area residents live in an earthquake-prone region.
Not that many consumers choose to buy earthquake insurance, even though the Bay Area has a 63 percent chance of having an earthquake with a magnitude of 6.7 or greater over the next 30 years, according to a study released last year by U.S. Geological Survey. Statewide, the risk is over 99 percent. Only 12.6 percent of California homeowners and 8.2 percent of renters have earthquake insurance.
To obtain earthquake insurance, homeowners must first be covered by an underlying homeowner policy. Earthquake insurance to cover personal possessions is also available to renters, and
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owners of condos, townhouses and mobile homes provided there is an underlying residential coverage policy.
Many people mistakenly believe their homeowners insurance will help pay for their home to be rebuilt in the event of an earthquake, said Glenn Pomeroy, chief executive officer of the California Earthquake Authority, which accounts about 72 percent of the 1.16 million residential earthquake insurance policies in California. “Homeowners insurance specifically excludes earthquake insurance. You’ve got to make a choice to buy it. The risk is real and the federal government is not going to bail you out,” he said.
The CEA was formed in response to the high rate of claims paid out for the 1994 Northridge quake. Insurers were threatening to stop writing new homeowners policies in the California market because of a law that required them to offer earthquake insurance to policyholders. The solution was to set up the state-managed, privately-funded CEA. Its members include 17 insurance carriers who offer a basic, no-frills CEA policy intended to provide affordable coverage for the home itself but not other structures such as swimming pools and patios. In mid-2009, CEA had about 793,521 policyholders statewide..moreinfo
