It’s Time to Get Earthquake Insurance

If you’re a Californian, chances are you felt the July 4, 6.4-magnitutde earthquake that struck Searles Valley near the town of Ridgecrest. Even if you’re not a Californian, you might have felt the ground move. Shaking was reportedly felt as far as Mexico and Las Vegas, resulting in multiple damaged structures in Ridgecrest and the city of Trona and a big surprise for families out to enjoy the parades and barbecues.

The very next day, on July 5, a 7.1-magnitude earthquake struck seven miles away from the first quake’s epicenter. With the strongest temblors in 20 years and the looming threat of “The Big One,” (the inevitable catastrophic earthquake along the San Andreas Fault) the question is: why do only 13% of Californian homeowners have earthquake insurance?

People avoid getting earthquake insurance for two reasons: 1.) They believe an earthquake won’t happen to them, and 2.) They believe earthquake insurance is too expensive. While earthquakes happen infrequently, the Independence Day Quake reminded us that, unfortunately, they do happen. While ensuing damage might be minor, or occur in a remote area, there is always the chance an earthquake could be a severe event.

In the case of the “Twin Quakes” that occurred July 4 and 5 in Ridgecrest, there were no deaths, few injuries, and less than $1 billion in insurance payouts. While not a severe event, it served as a sobering reminder of what a bad earthquake might look like.

The bottom line is: if you live in California, you need earthquake insurance. Homeowner’s insurance and renter’s insurance policies cover damages from most sustained perils, including storms, rain, wind, fires, hurricanes and tornadoes, but specifically exclude earthquake damage and flood damage. Possessions inside the home are covered under homeowner’s and renter’s insurance but at a rate of about 50% – 70% of what the home’s value is insured for.

Earthquake insurance isn’t required in California (or any other state), which means it’s a choice that won’t be mandated. If an earthquake happens and you don’t have insurance, you’ll be left holding the bill for damages. But according to the California Department of Insurance, if you own homeowner’s insurance in the state, your insurance company has to offer you earthquake insurance in addition to your regular policy. That’s an offer you should take.

Earthquakes perfectly exemplify why people need insurance (especially earthquake insurance). We think that just because something happens infrequently, or far away, that it can’t happen to us, in the middle of the day, right in our own backyards.  When earthquakes do occur, the effects can be devastating, resulting in property damage, injury, and even death.

Moreover, earthquakes compound disaster on disaster, causing fires from severed gas lines and flooding from broken pipes while they sunder ground, possibly taking entire structures down, especially those not retrofitted for earthquakes. Earthquakes can also lead to downed power lines or road closures, making it impossible for emergency personnel to reach you in the aftermath of an earthquake.

But there is good news. According to CalTech seismologist Lucy Jones, who recently appeared on TBS’s late-night talk show “Conan” with Conan O’Brien, you aren’t very likely to die in an earthquake. When addressing common misconceptions, Jones noted:

“Most people are afraid of dying in an earthquake. You are far more likely to be murdered in Los Angeles than die in an earthquake. It makes the murder rate sound bad, but it’s actually showing how few people die in an earthquake.”

While that might not be the cheeriest reassurance, it is good to know. Jones advised anyone caught in an earthquake to shelter beneath a sturdy table or desk, and not to run outside, as the most common injuries in earthquakes are cuts from glass on the feet, broken legs, and twisted ankles. Jones explained that the main challenge is to stock up on water, as it may take up to six months for water to return to southern California due to aqueduct damage.

Jones left O’Brien with a parting question: “Do you have earthquake insurance?”

“I do,” O’brien replied. 

“Then you are one of ten percent of Californians who do,” Jones said.

One of the most profound aftershocks we’re experiencing from these earthquakes are the rising premiums on earthquake insurance. State seismic surveyors provide data to insurance companies about the most recent earthquakes, along with predictions for when and where the next may strike. While premiums will actually go down for most of California, about 25,000 policyholders, most of them in southern California, will see rates double or triple.

Let the most recent earthquakes be the wakeup call we all need to remind us that disasters can and do happen, and the difference between a setback and a devastation is planning. Ask your friendly Frontlight insurance broker how to get covered. At Frontlight, we’ll help you find your way–even in dark times.