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Earthquake coverage?

sirbob

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I've had it

I've not had it

Just looking at everything with the new year and considering not having it.

It seems like there is so much small print in earthquake coverage I'm not sure I'll get much benefit if I ever needed it.

Does anybody really understand if its worth it or not and what % deductible if you have it - the price drops by 50% if you have a 15% deductible vs a 5 % deductible.

Would love some real info ???
 

lbhsbz

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I think about how many earthquakes we've been through since 1942 when my house was built...and consider the fact that it's still standing and in reasonably good shape, so I decide against it. Every policy I've seen has a 15% deductible, which if something fairly catastrophic were to happen, I probably couldn't afford anyway, or I could fix it myself for 15% of what a good contractor would likely charge.
 

Jed-O

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When I built my place in '02, the engineer had placed 22 straps in the foundation, six 28" hold down bolts and anchors, and two Simpson strong walls. House is 1335 square feet and a two car garage under it.
I'm pretty sure that it isn't going to jump off the foundation and end up in the neighbors living room
 

sirbob

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So maybe a better question is who has and why do you feel the need to have it?

Again - anybody that can add info about what you really get with earthquake coverage, please reply...
how do FEMA funds effect payout? / do you have to have state of emergency declared to get payout? / etc
 

RCDave

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I think it depends on a few things.

* Construction quality / age of the structure.
* Proximity to an earthquake fault capable of producing an earthquake large enough to potentially cause damage.
* Type of soil the structure is built on.
* What types of faults are nearby. Strike slip versus thrust fault.
* How much equity is in the property.

I never had this coverage until recently. I opted for it as the annual cost is modest relative to significant property equity and liquidity would be protected in the event of significant damage.

No way I would want to gamble the government / FEMA would be there to protect me. Government is not to be trusted
 

sirbob

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I think it depends on a few things.

* Construction quality / age of the structure.
* Proximity to an earthquake fault capable of producing an earthquake large enough to potentially cause damage.
* Type of soil the structure is built on.
* What types of faults are nearby. Strike slip versus thrust fault.
* How much equity is in the property.

I never had this coverage until recently. I opted for it as the annual cost is modest relative to significant property equity and liquidity would be protected in the event of significant damage.

No way I would want to gamble the government / FEMA would be there to protect me. Government is not to be trusted


I'm certainly not thinking FEMA money will rebuild my house - I bring up FEMA because I've heard that you can't payment from INs company unless they do something to trigger it and or you need to collect form them first them go to private??? IDK? Thats why I'm asking so I can make a better informed choice.

Based on your other thoughts -

* Construction quality / age of the structure. - Older - should I be more likely to have ins?
* Proximity to an earthquake fault capable of producing an earthquake large enough to potentially cause damage. - I kind of feel like anything in SOCAL is in jeopardy at some point?
* Type of soil the structure is built on. - again are you thinking loser soil - more ins?
* What types of faults are nearby. Strike slip versus thrust fault. - I live near a bluff on the ocean - what does that mean?
* How much equity is in the property. - LOTS - now what?
 

RCDave

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I'm certainly not thinking FEMA money will rebuild my house - I bring up FEMA because I've heard that you can't payment from INs company unless they do something to trigger it and or you need to collect form them first them go to private??? IDK? Thats why I'm asking so I can make a better informed choice.

Based on your other thoughts -

* Construction quality / age of the structure. - Older - should I be more likely to have ins? Seems logical as building codes were less the older a structure is. Modern structures are built much stronger with sheer paneling, engineered trusses, better foundations, foundation strapping, etc.
* Proximity to an earthquake fault capable of producing an earthquake large enough to potentially cause damage. - I kind of feel like anything in SOCAL is in jeopardy at some point? Hard to argue this! The entire area is riddled with faults running in various directions. But certain faults like the san andreas etc are capable of producing a much larger quake than shorter faults.
* Type of soil the structure is built on. - again are you thinking loser soil - more ins? Soils like allevial or loose soils are known to liquify during shaking. The firmer and rockier the soil are proven to shake less.
* What types of faults are nearby. Strike slip versus thrust fault. - I live near a bluff on the ocean - what does that mean? Strike slip are the faults that more more laterally. Thrust faults tend to more vertically. The Northridge quake was a thrust fault that produced substantial up and down G forces, causing substantial damage. I was living close to that one and thought the end was near in that one! lol
* How much equity is in the property. - LOTS - now what? The more equity there is to protect, I believe the more it makes sense to have some level of earthquake insurance. Not only to protect the equity but the liquidity or debt would be needed to come out of pocket to effect repairs.
 

hallett21

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If you have enough equity in the property that a full tear down would be your problem more than the banks I would consider it.

I was 3 when north ridge happened. What was the insurance situation back then?

Did CA declare an emergency?

Was FEMA money used?


If 1000’s of homes were flattened and the banks had a vested interest in them. I bet there would be a “miracle” and repair money would show up somewhere. No way they would take that kind of L especially with the value of property in Southern CA.

Not saying you should bet your home on the above but banks got bailed out for shitty business tactics. A natural disaster would be a walk in the park for them.


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LargeOrangeFont

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If your home is flattened today in CA from a earthquake it will take you YEARS to rebuild it.
 

batterup

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I think it depends on a few things.

* Construction quality / age of the structure.
* Proximity to an earthquake fault capable of producing an earthquake large enough to potentially cause damage.
* Type of soil the structure is built on.
* What types of faults are nearby. Strike slip versus thrust fault.
* How much equity is in the property.

I never had this coverage until recently. I opted for it as the annual cost is modest relative to significant property equity and liquidity would be protected in the event of significant damage.

No way I would want to gamble the government / FEMA would be there to protect me. Government is not to be trusted

The above statement in bold is the #1 reason to have it in my opinion.
 

Cole Trickle

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https://www.earthquakeauthority.com/

I would take a look at the CEA website. Lots of good information and a rating calculator. (Use the current dwelling on your most recent home policy)

I sell it and have to have quite a few conversations with clients on what I think.

Honestly it depends and its a personal choice.

Like mentioned if you have a bunch of equity in the house and the premiums make sense I say go for it.

If you have that 15% deductible in savings that you can throw at the house go for it.

Personally I don't have EQ coverage. The premiums for my location (Corona) are high last time I quoted it my premium was over $1200 a year with a 60K deductible. I owe 330K on my house and market value might be 510K so I wouldn't have a ton of equity if the loss was to happen right now. Perhaps I would be better off using that 60K for a down payment on a new property.

One of my other thoughts are what will the states infrastructure look like if we have a big enough EQ that my tiny single story in Corona that was built in 1994 is completely demolished, Is my work still around,etc? Maybe I'm using that 60K for an out of state property because we are sliding into the ocean:D.

Its a gamble you could end up wasting 25K in premium or you could look like a genius if we have the big one tomorrow.
 

batterup

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If your home is flattened today in CA from a earthquake it will take you YEARS to rebuild it.

Earthquake insurance can help pay for lodging and other expenses while your home is being rebuilt. However, I agree it would take years and the insurance money would probably run out a long-time before completion.
 

LargeOrangeFont

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Earthquake insurance can help pay for lodging and other expenses while your home is being rebuilt. However, I agree it would take years and the insurance money would probably run out a long-time before completion.

Can you imagine the red tape CA will put people through to rebuild.... solar systems, code updates, permits, tax reassessments etc. That is not even factoring in the shortage of supplies and labor to get the work done.

If my house got flattened or red tagged, I'd just move, and sell the lot after things were rebuilt, or rebuild the house down the road and then sell it.
 

sirbob

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https://www.earthquakeauthority.com/

I would take a look at the CEA website. Lots of good information and a rating calculator. (Use the current dwelling on your most recent home policy)

I sell it and have to have quite a few conversations with clients on what I think.

Honestly it depends and its a personal choice.

Like mentioned if you have a bunch of equity in the house and the premiums make sense I say go for it.

If you have that 15% deductible in savings that you can throw at the house go for it.

Personally I don't have EQ coverage. The premiums for my location (Corona) are high last time I quoted it my premium was over $1200 a year with a 60K deductible. I owe 330K on my house and market value might be 510K so I wouldn't have a ton of equity if the loss was to happen right now. Perhaps I would be better off using that 60K for a down payment on a new property.

One of my other thoughts are what will the states infrastructure look like if we have a big enough EQ that my tiny single story in Corona that was built in 1994 is completely demolished, Is my work still around,etc? Maybe I'm using that 60K for an out of state property because we are sliding into the ocean:D.

Its a gamble you could end up wasting 25K in premium or you could look like a genius if we have the big one tomorrow.

Great info - I’ll check out the link...
 

WildHorses24

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Great info - I’ll check out the link...

I’ll add .02 as an agent who’s paid out on EQ claims in the past. If the premium is crazy high, there’s usually a reason. CEA works with Caltech very closely and knows if the faults are running in your front yard vs backyard. They know about how many years on avg those faults go off and how intense they will be.
The properties I paid on were older homes with termite damage over the years. Yes they survived MANY quakes and were not leveled but the owner was glad they ONLY had to pay $25-$35k to repair the $200k+ damage.
Also, if there is major damage and a fire after. The pile that was once your home is now considered “Hazardous waste” and has to be removed properly ($$$$) which there’s Building Ordinance/law & Demolition removal coverage on EQ for that.
The major downside I’d say is whoever your lender is... check is made out to Homeowner and mtg. Some banks just sign off and say fix it, others take the money and release it to you in small amounts as needed.
FEMA? Do we even have to go there?
If you’re considering it, I’d suggest at least taking the basic policy and skip on the personal property and higher deductibles. Especially if you’re anywhere near the San Andres. The CEA has built up a ton in reserves and recently reduced its rates because of it over the past couple years.


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Sherpa

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I had it 25 years ago. For 2 years.

House was $235k then. EQ policy was $785/year. Reg homeowners was about the same..

Then I checked the deductible..

The first $55K was on me...

Dropped that policy like a 2 dollar pistol.

For $55k I could have rebuilt the whole damn house myself
 

sirbob

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Here are the numbers for me now - it really seems pretty cheap when I consider what our last appraisal came back at...


Dwelling: $762,000
Personal property: $100,000
Loss of use: $100,000

Annual premium:
5% deductible: $753
10% deductible: $566
15% deductible: $445
 

Cole Trickle

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Here are the numbers for me now - it really seems pretty cheap when I consider what our last appraisal came back at...


Dwelling: $762,000
Personal property: $100,000
Loss of use: $100,000

Annual premium:
5% deductible: $753
10% deductible: $566
15% deductible: $445

I would buy that policy....

Like mentioned I have half the house/coverage and my quote is over $1200 a year for a 15% deductible.
 

lbhsbz

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A guy I know up in SB lost his house in a fire a few years back...reconstruction starter after a year or so, and new codes required that he put in a retaining wall. Last I heard, he was 300 yards of concrete into the project. I'll just move if something bad happens.
 

LargeOrangeFont

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Here are the numbers for me now - it really seems pretty cheap when I consider what our last appraisal came back at...


Dwelling: $762,000
Personal property: $100,000
Loss of use: $100,000

Annual premium:
5% deductible: $753
10% deductible: $566
15% deductible: $445

Geez, I'd do that right now. I was quoted significantly more than that several years ago when my house was worth a lot less.

All of this said, I know you are in South OC, as am I. If our houses got leveled I also fear we may have bigger problems related to the power plant.

Is $762K your home value? Or the rebuild cost of the house?
 
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rightytighty

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Cole Trickles thinking is in line with mine... it would depend on Loan to value for me as the policy is really minimalist in that high end details are limited in many areas and the deductible is brutal. I do not have it on my house.

if the house is paid off or L to V is super low, I’d consider it strongly to protect my asset (sorta protect it)....

I’m in the industry. I don’t ever wanna have to deal with a huge event and those claims that would follow. My worst work fear actually. Every single claim would suck. When I write a fire estimate now, I KNOW that the insured can build a very nice house (nicer than what they had if properly insured), to deal with the shitty experience of losing their home.

A big EQ... Not so much.
 

sirbob

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Geez, I'd do that right now. I was quoted significantly more than that several years ago when my house was worth a lot less.

All of this said, I know you are in South OC, as am I. If our houses got leveled I also fear we may have bigger problems related to the power plant.

Is $762K your home value? Or the rebuild cost of the house?


Rebuild - add 1m for value
 

DC-88

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So maybe a better question is who has and why do you feel the need to have it?
Type of construction is the reason I have it on both my homes. Steel trowel baby butt finish stucco with 100% mud 2 piece clay tile roofs which in today's economy would be big bucks to re-do, combined with all the other incidental cracking and touch ups that come with a big quake are worth it to me. Plus as a contractor I can get plenty of bids when the big one hits to hopefully cover at least most of the ridiculous deductible . If I had a newer home on a flat lot with good soil , comp roof, and siding I would not have it. jmo
 
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