DID YOU FEEL IT? EARTHQUAKE INSURANCE
My family has a tradition on the 4th of July to begin our celebration with what we’ve titled Papa’s Patriotic Pancakes at Old Poway Park. I was talking with my dad on the 4th when I thought I felt a slight shake. I asked him if he felt it, but he didn’t, and no one else around seemed to react too much. Later he told me I was right and there was an earthquake in Ridgecrest, CA that morning. It turns out it was pretty significant at a magnitude 6.4, and the following day there was a 7.1 earthquake in the same area (I didn’t feel that one). California experiences about 90% of the nation’s earthquakes, yet that is about the same percentage of people without earthquake insurance in the state.
Earthquake insurance is exactly as it sounds, it covers your home and property against damages caused by earthquakes, which are not covered by your homeowner’s policy. In the past, most people felt it was too expensive, as costs skyrocketed and many insurers stopped issuing coverage after a series of devastating earthquakes in CA. As a result of that, the California Earthquake Authority (CEA) was formed. Many of the most popular insurance companies now affiliate and write policies through CEA.
As has always been and continues to be the case, earthquake insurance generally has high deductibles. This coverage is designed to insure against major damage.
Here are a few reasons you may want to consider purchasing earthquake insurance:
Homes are often a significant asset and large part of household net worth in CA.
I believe it can make the most sense to insure against events with low probability but high impact. These tend to be relatively less expensive to insure compared to high likelihood events, which often make more sense to plan for, or self-insure.
Costs have come down in many areas and you can design a policy balancing the coverage and premium that you’re comfortable with.
Those that have discussed insurance with me know that I tend to lean towards putting enough insurance protection in place to give you peace of mind and protect you and your loved ones from significant financial impact. Yet, I don’t want anyone spending exorbitant amounts of money insuring against events that you hope never take place, knowing there is a higher probability that you could invest that money for you to spend and enjoy in the future. The right types of insurance coverages are unique for everyone and knowing your options and what is available can help you make informed and purposeful decisions.
To learn more about earthquake insurance and to get a cost estimate, go to the California Earthquake Authority website at https://www.earthquakeauthority.com/. The California Department of Insurance also has information available at https://www.insurance.ca.gov/01-consumers/105-type/95-guides/03-res/eq-ins.cfm.
Advisory services offered through Arbor Point Advisors. Securities offered through Securities America Inc., Member FINRA/SIPC. Arbor Point and Securities America are separate companies. CA Insurance #0E88557
