Ready for ‘The Big One’? You can be with new, more affordable earthquake insurance policies
It has been just over 23 years since the Northridge earthquake shook Southern California awake early one January morning, killing 57 and causing billions in property damage. Over the past two decades the cost to rebuild or repair homes has increased by approximately 170 percent, yet at the same time the premiums for earthquake insurance have come down substantially, according to the California Earthquake Authority.
The CEA, a non-proft that provides earthquake insurance for Californians, recently released a statement to remind homeowners and renters that, though the Northridge quake occurred back in 1994, we should not be complacent. “As we commemorate the devastation from 23 years ago, we also need to listen to what is forecast for the future,” CEA CEO Glenn Pomeroy said in the statement. “The U.S. Geological Survey says there is a 93 percent chance of a magnitude-7.0 earthquake occurring in California in the next 30 years—a massive quake that would be three times as strong as the Northridge catastrophe.”
Pomeroy also pointed out that his organization has made getting earthquake insurance easier and more affordable. In 2016, the organization began offering premium discounts for older retrofitted homes. The discounts range from 5 to 20 percent depending on the age of the home and whether or not a qualified inspector can certify that the retrofit was done correctly. Overall, the CEA says it has lowered its rates more than 55 percent since the non-profit was established in 1996.
The CEA now also offers up to $3,000 in seismic retrofit incentives for wood-frame homes built before 1979 on a raised foundation through its Brace and Bolt Program. In some cases, this incentive can cover the majority of the cost of the retrofit and could save many more thousands in damage in the event of a major quake.
The CEA also recently began offering a premium calculator for homeowners and renters on its website. The calculator takes into account the age and location of the home, as well as its current insured value to come up with an initial premium. Then owners and renters have the option to upgrade their coverage and set a deductible level between 5 and 25 percent to create a policy and monthly premium that works for them.
These new tools and financial incentives have encouraged 50,000 new policyholders to sign on in the last year, according to the CEA. That’s a growth rate ten times higher than the average over the previous decade.