Wednesday, October 19, 2011

Earthquake Insurance Is like the Flu Shot


Cary Mann knows a major earthquake in Southern California could be catastrophic. But Mann doesn't carry earthquake insurance on either his Cathedral City home about 115 miles east of Los Angeles or on the hair salon he co-owns there.

"None of my family has ever had it," he said. "They've always said that if there was ever going to be a 'Big One,' the damage would be so massive that the insurance would never be able to pay out to everyone."
Many in the state feel the same way. According to the Insurance Information Network of California, fewer than 12% of the state's homeowners had earthquake insurance last year, and fewer than 10% of businesses had the coverage.

I'm quite impressed with the excuses.  According to one source, standard earthquake insurance in the East has a return period of 2000 years.  In other words, the rate is set for a totally destructive event at that probability.  I don't know what the insurance rate is in California, but a destructive event can be expected every 50 years.

If you are in the east, have a brick house, and have been strongly feeling all these latest earthquakes, then you should get the insurance.

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