Earthquake insurance used to be a “take it or leave it” proposition. There was one provider (in California), one deducible, and one coverage amount (based on property value). That’s all changed, according to Bernhard Hoehle of Goosehead Insurance. With more than $10 billion in claim-paying capacity, the California Earthquake Authority (CEA) now has and has the ability to offer more choices. Here’s what we gleaned in our last Riviera Village Leads Club meeting:
Not so long ago, Californians could not get earthquake insurance at any price. Then the California Earthquake Authority was formed to provide at least an opportunity, but the terms could be prohibitive to those that most needed to avoid the risk. Coverage was only provided after a 15% deductible, personal property loss was limited to $5000 and loss of use was limited to $1500. Owners of modest means with a total loss of a $600,000 house would have to come up with $90,000 just for the deductible to rebuild. Loss of use could run to some additional tens of thousands, while they scramble to find living quarters during the rebuilding. And then they only have $5000 to furnish the rebuilt house. A disaster would bankrupt most owners, even with Earthquake Insurance.
Now the CEA and other carriers offer affordable insurance that makes sense to all. Deductibles can be reduced to 5%, Personal Property (belongings) can be covered up to your desired limit and Loss of Use can be increased to $100,000. Loss of Use has no deductible, so you can get an initial check cut on the spot, in order to get you over the first weeks. Your coverage should include a Building Code Upgrade provision, which enables you to bring your home up to the current building code while making covered repairs. In addition, coverage is available for condominium owners, mobile home owners and even renters.
One limitation is that CEA insurance is only available with certain Homeowners policies offered by a participating insurance company.
If you want even more choice, there are now standalone Earthquake Insurance policies offered by several different carriers. These policies offer a variety of deductible and coverage options. This virtually guarantees that a well-informed insurance agent can find a policy that matches any family’s needs.
A conversation with a licensed agent is recommended and necessary to ensure that all coverage concerns have been addressed. To speak to a well informed agent, contact Bernhard Hoehle HERE.
(As reported by Pat Welch)