Save Money / Consumer News
Carriers offer better quake insurance options
LOS ANGELES, Calif. (KABC) -- Because earthquakes are few and far between, which is certainly a good thing, most people don't think about having earthquake insurance. But if a big one hits it could be too late.
In a matter of seconds hundreds of buildings and homes were destroyed when an 8.8 earthquake hit Chile over the weekend.
A quake of that magnitude may never strike Southern California, but any large quake could be nearly as devastating depending on how long it lasts, just think of Northridge in 1994.
"If you lived through the Northridge quake then you know how powerful that quake was" said Peter Moraga, from the Insurance Information Network. "You saw the aftermath. We actually had freeways down, we had buildings collapse, and we had people that were killed."
While the majority of property owners in Chile have earthquake coverage, only 12.5-percent of California homeowners are insured for an earthquake, cost is the biggest reason.
But in today's economy many homeowners are considering just walking away from their home if it's destroyed in a quake because it has little or no equity. But that could be a big mistake.
"In 2005 bankruptcy laws actually changed so it is not as easy nowadays as it was in Northridge to just walk away from that debt," said Moraga. "The laws have changed so you will be responsible for some of it and keep in mind that a bankruptcy is going to last 10 years on your record."
And don't count on the federal government to do more than help you get back on your feet, they are not there to replace your home and everything else you lost. Today the California Earthquake Authority and other mainstream insurance carriers offer more quake insurance options.
"The California Earthquake Authority now has a policy with a 10-percent deductible. It is a little bit more expensive, but it is a lower deductible," said Moraga. "They have the opportunity to increase the limits on the structure and the limits on your content."
Remember, no part of California is immune from earthquakes, in other words there are no low risk areas in California.
earthquake, save money / consumer news, ric romero
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