Is Earthquake Insurance Worth It?

it’s really worth it

$100/year? Not in California – more like $2000/year. With a huge deductible.

Doesn’t State Farm use CEA (California Earthquake Authority) for their earthquake insurance? They don’t quote for earthquake on their web site.

Around here (San Jose) construction cost is about $200/sf, so $360,000 would be the rebuild cost. 15% is $54,000. It’s unlikely that I would suffer nore than that in damages unless “The Big One” hits. If (when) that happens, the insurance companies will go broke anyway.

LOL, yes St Farm does not do EQ on their paper …..I have been an agent for 13 yrs in CA and lived here my whole life…..my take on EQ is this. You figure out the equity you have in the home then look at what a total loss would cost you, vs- a standard EQ policy that replaces the home but doesn’t give much $5k personal property and $1500 loss of use, and use some common sense. If the home was built in 1940 and is still standing and never sustained more than 15% of the cost to rebuild in damage from any of the number of EQ’s we have had since 1940 then you are taking a calculated risk not having EQ insurance, if you own your home outright and are counting on the equity on that home to retire with or filling some other need, then look at the cost $800-3000/yr and if it doesn’t impact your lifestyle one way or the other get it. Or hope really hard that FEMA will assist you with the rebuild in the event of a total loss.

Why don’t mortgage companies require earthquake insurance for homes in high risk areas? Do they know something we don’t know? They typically have just as much and sometimes more at risk than the many homeowners, as the mortgage companies equity can be greater than the owner’s in many cases.