Today's 7.2 Earthquake is likely to get California property owners thinking about earthquake insurance coverage for their investments. If you have never sought earthquake coverage for our California property you will likely be surprised by the cost and the structure of the policies. The market for earthquake insurance has been hard for a few years now, what that means to policy owners is that earthquake insurance is expensive. We have not seen a significant earthquake event for a period of time, and in combination with other factors in the reinsurance market this has made for a tight market with very expensive premiums. Not only are premiums high but earthquake insurance policies are structured differently than most insurance coverages.
As Senior
mortgage Broker Arnaud Dufour accurately pointed out, less than 10% of California's residential and commercial property is currently protected by some form of earthquake insurance coverage.
An example of how most earthquake insurance are structured is as follows, we'll use a $1,000,000 California property. The policy would be structured with a TIV(Total Insured Value) and a high deductible, usually 10% or higher. So in this example the property would have to experience a loss in excess of $100,000 before the earthquake policy would respond. Another surprise for many commercial and multifamily property owners when they seek earthquake coverage is the carriers that offer earthquake insurance coverage, you will not see many names you are familiar with as this is a specialized market.
Biggest Earthquakes in California in the last 30 years. So where did yesterday's quake rank in recent California quake history (measured by magnitude)?
7.3 - Landers 6/28/92
7.2 - Cape Mendocino 4/25/92
7.2 (estimate) Southeast of Mexicali, Mexico 4/4/10
7.2 Off the coast of Northern California 6/14/05
7.1 Hector Mine 10/16/99
7.0 Honeydew 8/17/91
6.9 Loma Prieta, 10/18/89
6.7 Northridge 1/17/94
6.6 San Simeon 12/22/03
6.6 Off the coast of Northern California 6/16/05
6.5 Off the coast near Eureka 1/9/10
6.2 Joshua Tree 4/23/92
6.0 Central California 9/28/04
5.9 Humbolt County 2/4/10
5.6 Sierra Madre 6/28/91
5.6 San Francisco Bay Area 10/30/07
The earthquake on 4/4/2010 was one of the biggest earthquakes in the last 30 years and we were lucky the energy went northwest of Mexicali toward a less populated area.
Dare to Prepare
Do you know the seven steps to earthquake safety?
1. Secure it now!
2. Make a Plan.
3. Make disaster kits.
4. Is your place safe?
5. Drop, Cover, and Hold on!
6. Check it out!
7. Communicate and Recover!
You can find more information on each of these steps at
www.daretoprepare.org.
Remember, it is never too soon to be prepared or to buy Earthquake coverage for your California property.
To avoid the pit falls in this specialized insurance market you should seek the advice of a
California based commercial insurance broker who can guide you through the process. You can also contact me anytime with questions about earthquake coverage at:
Tim Pine
Arroyo Insurance Services
timp@socalinsurancebroker.com
(949) 340-9662
Labels: California Earthquake Insurance
