San Francisco Injury Lawyer Blog
As San Francisco insurance claim attorneys we know that even when you have insurance coverage, sometimes it is a struggle to get money from claims. Insurance companies are run for profit, and the more claims they can reject for whatever reason they can find, fair or unfair, the more money will go towards their profits. This blog has covered what can happen to property owners when insurance companies use their tricks over fires, wind, and floods. But Californians also have earthquakes to contend with, and like flood insurance, most general homeowner’s insurance policies do not cover earthquake damage. Although a serious earthquake has not occurred recently, a 7.4 earthquake last month in Mexico should have people thinking about protecting their property. News sources have been speculating for the past few years about when California is due for the next “Big One” and how much damage it could do.
A recent article in the Orange County Register stated that 88 percent of private homeowners and 90 percent of business owners in California do not have earthquake insurance. This saves between $400 and $1200 in premiums a year. Earthquake insurance has become more expensive in the last decades after the Loma Prieta earthquake in 1989 and the Northridge quake in 1994. The Northridge quake caused an estimated $19 billion to $29 billion in damages and caused premiums and deductibles to rise. Since the devastating Northridge earthquake 17 years ago, the average Orange County homeowner has saved about $8500 to $17000, but that money will pale in comparison to the costs of rebuilding if another serious earthquake strikes. At that point, your deductible is basically 100 percent if you have no insurance. Also, many people are not aware of the fact that mortgage holders are still responsible for paying their mortgage even if their house is completely destroyed.
Many Californians could be in the terrible position of paying to rebuild their house while still paying a full mortgage.
Some expect the government will bail them out from a future theoretical earthquake disaster. But emergency government assistance is meant to get people back on their feet and make sure they are safe, not to rebuild their home or replace their lost property. Another consideration is that after an earthquake, there could be peripheral damage as well that would be covered under your homeowners policy but perhaps not if the cause of the damage is an earthquake. An example of this is if an earthquake causes a pipe to burst, flooding your house. You may have insurance that covers burst water pipes, but if the cause of the burst pipe was an earthquake you may not be covered. 
California law does require insurance companies that sell residential insurance policies to offer a supplemental earthquake insurance plan to policyholders under California Insurance Code section 10081. Insurance companies are required to offer such coverage even if your building or house does not conform to the current Building Codes-although the company can charge an additional premium or higher deductable. A great place for resources on earthquake insurance regulations and California’s detailed insurance laws regarding this is the Department of Insurance’s earthquake insurance page for consumers.
If you are concerned about investing so much money into yet more insurance in a time of economic hardship with the worry that when the “Big One” comes the insurance company will cheat you out of your claim money, there are experienced California insurance attorneys that will be available to help you with your insurance case. In light of how severe the physical and financial damage can be, it seems time for Californians to at least consider how prepared we are for a future earthquake.
See Our Related Blog Posts:
California Takes Action Against AIG Subsidiary for Mishandling of Fire Claims
Wind Damage: Understanding Your Policy