June 18, 2005
The recent series of earthquakes rattled Californians' nerves and came as a jarring reminder that earthquake damage is not covered by homeowners' policies. The time for homeowners to be sure they're covered is before a damaging quake hits, not after.
Although earthquake coverage is not automatic, it is available to all California homeowners as an add-on to their homeowners policy. Homeowners and renters should check with their agent to be certain they are covered for earthquake damage.
Most earthquake coverage in the state is underwritten by the California Earthquake Authority, the world's largest residential earthquake insurer. Established by the California legislature in 1996 after the disastrous 1994 Northridge quake, the CEA makes coverage available to homeowners, mobilehome owners, condominium owners, and renters throughout California and provides retrofit assistance to help people protect their houses against earthquakes.
Under the 1996 law, insurers that sell residential property insurance in California must also offer their policyholders earthquake insurance. Companies can offer a private earthquake policy or, if they join the CEA, a CEA policy.
Companies that offer CEA coverage include:
- Allstate Insurance Company
- Armed Forces Insurance Exchange
- California FAIR Plan
- CSAA
- Encompass Insurance (formerly CNA)
- Farmers Insurance Group
- Homesite Insurance of California
- Interinsurance Exchange of the Automobile Club
- Liberty Mutual
- Merastar
- Mercury
- Prudential
- State Farm Insurance
- USAA
- Workmen's Auto Insuranc
CEA coverage is sold through the companies that write homeowners' insurance, not directly by the CEA. Homeowners should check with their insurance agent to be certain they have earthquake coverage. Those in areas prone to landslides and mudslides should also have flood insurance.
CEA rates average $2.79 per $1,000 of coverage, per year. An average house that carries $100,000 of fire insurance will cost $279 per year for CEA protection against loss from earthquake, according to the CEA Web Site. The $2.79 rate is an average rate: Residents in higher-seismic-risk areas pay higher rates than those in lower-seismic-risk areas.
Base-limits CEA policies carry a 15% deductible based on insured value.
The CEA homeowners policy pays to repair an insured house when loss from covered earthquake damage exceeds the deductible. Pools, spas, fences, and patios are not covered; detached garages and other outbuildings are also excluded from coverage.
Be Prepared
Most structural damage in earthquakes comes from the side-to-side rocking motion. Newer structures are built to withstand this motion but older homes may not be. At a minimum, check to see that:
• Your home is bolted to the foundation;
• Support walls are braced with plywood. Support walls are short sections of wall between the floors of your home and the foundation;
• The water heater is secured with metal straps;
• Gas, electricity and water shut-off valves are working and accessible;
• Flexible connectors are installed where gas lines meet appliances.
Protecting Your Possessions
These basics steps will help protect your personal possessions during an earthquake:
• Install latch devices on cabinet doors;
• Securing hanging items to wall studs;
• Remove all glass items from sleeping areas;
• Put heavy objects and breakable items on lower shelves;
• Anchor bookcases and other heavy furniture to the wall studs with bolts and angle brackets.
Personal Safety
Everyone in your family should know where to go and what to do when a quake strikes. They should drop to the floor, take cover under a sturdy piece of furniture and hold onto it so that it doesn't slide away. Identify -- in advance -- safe spots in every room when you can quickly take cover.
You should have at least three -- preferably seven -- days worth of food and water for everyone in your family. Don't forget to include your pets in this equation.
Your emergency supplies should include:
- First aid kit
- Blankets/sleeping bags
- Flashlight
- Battery-operated radio
- Batteries
- Matches
- Extra clothing
- Items for personal hygiene
- Important papers such as insurance policies, bank records, etc.
- Money
- Medicine
- Eye glasses.
Each family should have an emergency plan. Discuss escape routes with your family. Make plans on where to meet if the family is separated when an earthquake strikes. And make sure all members of the family know where supplies are located and how to turn off gas and electricity.
