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Just wanted to take a moment to chat about the CEA California Earthquake Authority program. Earthquake insurance purchases have been up sharply. The CEA has sold 9,000 earthquake policies in January of 2018. That’s more than the average number of policies sold for an entire year from 2005 to 2015 and is on track to exceed last year’s record of 90,000 policies. What’s causing this big increase?
Well it’s been 30 years since the Loma Prieta earthquake and during the past one year the Bay area has had 385 minor earthquakes. According to the US Geological Survey there is a 63% chance the San Francisco Bay area will experience a 7.0 magnitude or greater earthquake in the next 30 years.
A couple of different factors for this uptake of earthquake coverage. Federal assistance. Many people believe the federal government will respond if there’s a major earthquake. Please don’t be disillusioned thinking to [inaudible 00:01:02] because they were not. High deductibles is another factor. High deductibles used to be at a 15% starting point.
Now it’s changed to be as low as 5%. So if you use high deductibles as a factor for an upwards in earthquake now’s the time to kind of reevaluate it. High costs. Earthquake coverage used to be very expensive back in the late ’80s when it was first introduced, but the earthquake cost has gone down significantly since then.
So once again if you want to use it as a factor for not buying earthquake before you might want to re-look at it again. What about earthquake retrofitting? Perhaps you live in a newer home okay and able to withstand moderate earthquakes. But unfortunately as you saw in 1989 liquefaction can swallow up the home in a matter of moments specifically in the marina district.
Your best option okay, and we confer with many of our clients on this, is come in, give us a call and we’ll take a look at some options with you together. See if earthquake coverage is a good option for you.