Majority of homeowners face the dilemma to buy or not to buy the Earthquake Insurance. Last year when Japan experienced Tsunami, our office was flooded with lot of wary homeowners looking to get a quick quote. As Tsunami settled down, all those prospective buyers also calmed down. Very few prudent homeowners went ahead and purchased that peace of mind for their family. I personally feel that it is the lack of education about the earthquake insurance that discourages most of the HO to buy this product.
If you were to talk to any of the witnesses who had experienced the 1994 Northridge earthquake, buying Earthquake Insurance Is not an option. I remember calling my clients on the morning of the Earthquake and the ones that had bought the insurance were worried and anxious about the devastation but were glad they had protection. The ones that did not have the policy – without exception wished they had purchased it when they had the opportunity. And the reasons for not purchasing were the same that we hear today: “the policy is expensive and the deductible is too high”. FEMA did assist with the deductibles with soft loans, however homeowners without Earthquake insurance were not able to get such loans from FEMA.
In the wake of the 1994 EQ, the state established California Earthquake Authority (CEA). It is a publicly managed and privately funded entity. CEA allows the participating insurers to offer EQ coverage to the customers who buy HO insurance through them. I would like to share an article on EQ coverage published by Westways Magazine. The article has details about the pros and cons of the EQ coverage given by the CEO of CEA, Glenn Pomeroy. Hopefully this article will help all the current Homeowners to come out of the guesswork of to buy or not to buy Earthquake Insurance.
Hers is the link: Standing on Solid Ground:
http://www.calif.aaa.com/westways/2012/01-02/Pages/standing-on-solid-ground.aspx
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