Home › Forums › Closed Forums › Properties or Areas › Earthquake insurance deductible
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Hatfield.
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October 15, 2015 at 8:11 PM #21720October 15, 2015 at 9:41 PM #790256
svelteParticipantThat’s why I don’t have earthquake insurance.
I checked the maps and I’m in a low-risk area for earthquakes. Most of my home value is in the land, not the structure. So why would I pay outrageous premiums for something that will pay very little if I need it?
Makes no sense.
October 16, 2015 at 12:14 AM #790265Hatfield
Participant[quote=ocrenter]So worse case scenario, the big one hits and the house comes crashing down. I would have to find $218k somehow before the earthquake insurance kicks in?[/quote]
As opposed to having to come up with $1,455,000 if you don’t have insurance?
The way I look at it: if the big one comes and the house comes crashing down, there will probably be state and federal loan assistance and other ways to scratch together the deductible. In our case, we have plenty of equity in the property so I think we’d be able to come up with the deducible one way or another. Beats walking away from the home and the equity.
October 16, 2015 at 6:29 AM #790274livinincali
Participant[quote=Hatfield]
As opposed to having to come up with $1,455,000 if you don’t have insurance?The way I look at it: if the big one comes and the house comes crashing down, there will probably be state and federal loan assistance and other ways to scratch together the deductible. In our case, we have plenty of equity in the property so I think we’d be able to come up with the deducible one way or another. Beats walking away from the home and the equity.[/quote]
Problem with a huge earthquake that devastates everything means the insurance companies won’t have the money to pay. If a huge earthquake comes to SoCal and causes 1+ trillion in insurable damage that money isn’t coming from anywhere. If you’re on a cliff in Del mar and you house slides down the cliff and the houses inland are fine then you’ll get paid to have earthquake insurance.
October 16, 2015 at 12:06 PM #790283Doofrat
ParticipantFrom what I understand, it has limited available funds. So if you’re in a low risk earthquake area (in San Diego and not on a fault like Rose Canyon) you’ll just be paying premiums on something you’re very unlikely to get anything from if a big enough quake hits to affect the low risk areas.
If you live in a high risk area, it’s probably worth getting.October 16, 2015 at 12:24 PM #790284no_such_reality
ParticipantIf your agent is quoting you $1.5m in coverage, your dwelling must be large and of high quality. I was under the impression only the dwelling is covered (optional personal property), from a cost to replace standpoint not including the land.
If he’s quoting you Market value purchase price versus rebuild dwelling price he’s doing you a disservice. Unless your planning for a 2500sf house and gouge rates of $600/ft to build.
October 16, 2015 at 3:17 PM #790292ocrenter
Participant[quote=Hatfield][quote=ocrenter]So worse case scenario, the big one hits and the house comes crashing down. I would have to find $218k somehow before the earthquake insurance kicks in?[/quote]
As opposed to having to come up with $1,455,000 if you don’t have insurance?
The way I look at it: if the big one comes and the house comes crashing down, there will probably be state and federal loan assistance and other ways to scratch together the deductible. In our case, we have plenty of equity in the property so I think we’d be able to come up with the deducible one way or another. Beats walking away from the home and the equity.[/quote]
That is one viewpoint I was looking at. Just quite a bit of a shock to see a > $200k deductible. Just have never seen it before, that’s all.
October 16, 2015 at 3:23 PM #790296Participant[quote=doofrat]From what I understand, it has limited available funds. So if you’re in a low risk earthquake area (in San Diego and not on a fault like Rose Canyon) you’ll just be paying premiums on something you’re very unlikely to get anything from if a big enough quake hits to affect the low risk areas.
If you live in a high risk area, it’s probably worth getting.[/quote]This is one reason why we have not looked into earthquake insurance until now. Here’s something regarding risk, would be nice if the map can zoom out a bit more.
http://www.conservation.ca.gov/cgs/rghm/loss/Pages/2010_analysis.aspx
October 16, 2015 at 3:26 PM #790297Participant[quote=no_such_reality]If your agent is quoting you $1.5m in coverage, your dwelling must be large and of high quality. I was under the impression only the dwelling is covered (optional personal property), from a cost to replace standpoint not including the land.
If he’s quoting you Market value purchase price versus rebuild dwelling price he’s doing you a disservice. Unless your planning for a 2500sf house and gouge rates of $600/ft to build.[/quote]
It is about the right replacement cost. The annual cost is not bad either, at around $550.
October 16, 2015 at 4:00 PM #790299Participant[quote=doofrat]From what I understand, it has limited available funds.[/quote]
Nah, I’m not worried about that. That’s why the California Earthquake Authority was created after the Northridge Quake. Earthquakes are highly localized events, but the risk pool is geographically diverse.
And it’s pretty cheap. I’m paying < $250 for our primary residence and under $200 for each of the rentals. The premium on the rentals of course is deductible.
October 21, 2015 at 8:02 PM #790572ParticipantHuh. This just in. NASA Study: 99 Percent Probability of 5-Mag Quake in LA Area by Mid-2018
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