Sound Off: Is earthquake insurance a good idea?

A: This is a common question that often is asked when exploring insurance options. It also depends on what kind of property the buyer is purchasing.

In condos, the insurance is normally covered by the homeowner’s insurance, and very few condo associations have earthquake insurance due to the high deductibles premiums. These costs tacked onto the monthly HOA fees can get pretty expensive. Often the HOA members do not vote in favor of having it. You cannot have earthquake insurance on an individual unit in a condo building.

However, please note condo dwellers and renters have policies that cover personal property and unit improvements. In the 1989 earthquake, Marina residents I know that had their belongings insured, found out it helped them furnish their new home when they moved to a more solid land base.

I had clients who lost everything in the Kobe, Japan earthquake years ago, so they were adamant about purchasing earthquake insurance at closing. Cost to them was not an issue.

Contrary to what some outofthestate buyers think, lenders do not require earthquake insurance. If you have an allcash purchase, then it definitely makes sense to protect your investment.

This decision basically comes down to personal preference and a buyer’s comfort level.

Jeannie Anderson, Compass, 4152714887, jeannie. anderson@ compass. com.

A: Since we live in earthquake country, I do recommend that homeowners get an earthquake insurance policy. Homeowners need to ask themselves if they could afford to rebuild their home and replace their personal belongs if an earthquake hit. This would not be covered by your regular homeowners’ insurance unless it were impacted by a secondary cause such as fire instead of earth movement. In the Bay Area, it is not unusual for a policy to run $ 2,000 a year.

Some things to consider: What are the policy limits? Amount of the coverage you can buy will depend on your insurance company, but you want to make sure you buy enough coverage to rebuild your home if it were destroyed. How much is deductible? Earthquake insurance deductibles are between 10% and 25% of the dwelling coverage policy limit.

What are the “special limits?” Earthquake policies often filled with special limits on how much they will price certain items’ repair structures. For example, they may limit the amount they’ll pay to replace a computer or to remove a felled tree and some policies won't cover damage to swimming pools.

Jeff LaMont, Coldwell Banker, 6507408808, jlamont@ cbnorcal. com.

A: No one who has gone through a disaster has ever regretted carrying “too much” insurance.

There are multiple earthquakes every day in the San Francisco area under a magnitude of 2, most never felt. In 2019, for example, there were 845 such tremors. But once a magnitude greater than 7 is reached, major destruction often ensues.

With today’s construction costs exceeding $ 400 per square foot it is thus surprising that only 10% of California homeowners carry earthquake insurance. The reason, of course, is the cost totaling to about $ 2500 for $ 500,000 of coverage. And if the policy carries the most common deductible, 15%, the homeowner is responsible for the first $ 75,000.

This is why I recommend that at the very least new homeowners do retrofit work such as bolting the foundation.

Astrid Lacitis, Vanguard Properties, 4158600765, astrid@ vanguardsf. com