In light of the recent earthquake and aftershocks that rocked Southern California, state authorities and experts are hoping the event convinces the public to secure earthquake insurance – especially when most of the region’s population lacks proper coverage.
According to a July 2018 study by the California Department of Insurance, only 13% of local residents had purchased earthquake insurance in 2017 – despite experts saying that there was a 99% chance that an earthquake of magnitude 6.7 or greater will hit California in the next 30 years.
Indeed, California Earthquake Authority (CEA) CEO Glenn Pomeroy believes that the true figure of how many Californians are insured could be much smaller.
“It’s alarming to think only about 10% of homes in California have earthquake insurance,” Pomeroy told CBS News in an interview, adding that the state is home to two-thirds of America’s earthquake risk.
Pomeroy went on to say that had the July 04 earthquake occurred in a more densely populated area, it is “likely that California would be looking at many more injuries and damages in the billions of dollars.”
“This event is an important reminder that all of California is earthquake country. We need to listen to the experts in the field who’ve been telling us for some time we’re going to get hit again, that the pressures on the faults are building,” the executive warned.
CEA is a non-profit that provides residential earthquake insurance. At present, it has about 2,000 policyholders in the areas affected by the quake. Overall, it insures over a million households in California.
One issue that’s preventing Californians from purchasing earthquake insurance is that it is not typically required, experts said.
“People in California don’t have to purchase earthquake insurance, generally speaking, when they are buying a home. It’s not a requirement like if you’re in a flood zone,” explained Janet Ruiz, a spokesperson for the Insurance Information Institute.
Cost is also another factor holding homeowners back from securing proper coverage.
According to Pomeroy earthquake insurance costs $800 per year on average, but what might cost $300 in Sacramento could reach up to $2,000 in Los Angeles, where the risk of quakes is higher.