Is earthquake insurance a good idea?

A: Earthquake insurance is an interesting consideration when owning a property. It’s a personal consideration that differs from buyer to buyer — some people want it, and others do not. I have experienced all-cash buyers wanting it to protect their investment in earthquake country, others who have previously lost everything in a debilitating earthquake so they consider it mandatory, and still others who feel that it is a waste of money.

Back in the ’90s, insurance companies pulled their coverage out of California and cancelled coverage for policy holders after years of premiums being of paid. In the event that your home is damaged by an earthquake and you don’t have this coverage, you’ll likely have to pay for repairs entirely out of your own pocket.

For condominiums, very few buildings have this insurance in addition to the normal insurance coverages, due to the expense. The high policy cost and high deductibles mean many homeowners go without this coverage.

If you live in an earthquake-prone area, you’ll need to weigh out whether the risk of losing your home and not having coverage is worth the cost of the policy itself.

Jeannie Anderson, Compass,

415-271-4887, jeannie.anderson@compass.com.

A: Homeowners and renters insurance do not cover earthquake damage. A standard homeowners or renters policy will, however, generally cover losses from fire following an earthquake, and if a fire makes your home unlivable, cover the additional living expenses incurred while you live elsewhere during repairs.

In California, the risk for earthquake damage is significant, and determining if you need earthquake insurance is important. If you are thinking about buying a home in an earthquake-prone location, assess the cost of earthquake insurance coverage to understand the property’s risks and the cost of insuring. You can get an idea of how close you live to a fault line by looking at the National Seismic Hazard Map.

Earthquake insurance is not required, but insurance companies are required by the California Earthquake Authority to at least offer it to homeowners policy holders each year. The risk is real, but ultimately, the decision is up to each individual, and how much risk they can handle.

Kathleen Daly, Coldwell Banker, 415-519-6074, kdaly@cbnorcal.com; Lisa Lange, Coldwell Banker, 415-847-7770,

lisalange@coldwellbanker.com.

A: Yes. Of course it’s a great idea, because insurance is meant to provide the ultimate benefit — peace of mind! But do you need it? Is it a prudent investment given escalating premiums? The answer is “it depends” on how much you want to pay and how well you sleep at night knowing the “Big One” is predicted by seismologists as inevitable here in the San Francisco Bay Area.

I’ve owned my primary home since 1986; I purchased earthquake insurance in 2017 because I now have significant equity in my $2.5 million home and I want it protected. My (annual) premium started at $3,014 with a 15% deductible and and the premium has increased each year, yet I still think it’s worth it.

The California Earthquake Authority (CEA), the insurance provider, appears to be well-funded ($19 billion in claim-paying capacity) and well-managed. My theory — I can afford the premiums but I can’t afford the cost of rebuilding my house without earthquake insurance.

So, if the Big One hits ... I’ve done everything I can to safeguard my home and family.

Tom Hart, Berkshire Hathaway/Drysdale Properties, 925-321-3220, tom@tomhart.com.