While, it’s true that major earthquakes aren’t a regular occurrence in California, the damage that can occur can be costly after a sizeable quake hits the region. Many Californians think earthquake damage isn’t a significant enough concern or that government assistance will come to their aid. But government assistance isn’t likely to cover the cost of rebuilding a home or replacing destroyed or damaged contents.
If for example, the foundation of your home gets badly cracked, yet your house remains standing then you may wind up paying out of pocket if you have no OC insurance that specifically covers earthquake damage. Most homeowners insurance specifically excludes damage caused by an earthquake. Coverage is usually available for earthquake damage in the form of an endorsement to a home or business insurance policy as well as a standalone policy.
Many have opted not to buy coverage
Currently, only about 17% of homeowners in California carry earthquake insurance, this according to the California Earthquake Authority. This is a potentially disastrous financial situation for many living in the state. The US has about 20,000 earthquakes a year, most of which are relatively small, with surprisingly 42 states that are at risk of quakes, according to the U.S. Geological Survey.
As an example of just how damaging a major quake can be, one of the worst catastrophes in US history, the San Francisco earthquake of 1906, would have, by today’s economic standards, caused insured losses of $96 billion, according to AIR Worldwide.
Information for condo owners
If you own a condominium you can buy earthquake insurance to cover damage to your belongings. It can also pay expenses for temporary living conditions while your condo is being repaired. Coverage is available to help pay for your condo association assessment to repair your building, something that may be required.
Your HOA may have insurance for common areas and the exterior structure of the building; however, it may not cover earthquake damage to those common areas. Additionally, your association may require you, along with other unit owners, to share repair costs or help pay part of their policy deductible through an assessment. Speak to your condo association so you can have an understanding of just what is and isn’t covered. Speak to an agent about OC insurance that can provide you with a policy for earthquakes.