The Number Of Homeowners Insured Against Earthquakes Drops Despite Rising Threats And Damage Costs.
Recent research shows that about 10 percent of American homeowners have earthquake insurance. In 2012, the percentage was slightly higher. Western states had a higher concentration of homeowners with this type of coverage. However, the number had decreased from 27 percent in 2012 to 22 percent in 2013.
Experts say that the famous Northridge earthquake happened 20 years ago. At that time, nearly 30 percent of homeowners in California had earthquake insurance. However, they estimate that the number of California homeowners with this type of insurance today is only about 10 percent. Although the number of people buying coverage has become lower, the possible costs of earthquake damage have only grown. This is partially due to the constant growth of urban areas and the vulnerabilities of older buildings. Not all of the older buildings have been brought up to code.
Since 1900, experts say that earthquakes have happened in all 50 states in the U.S. In 2011, there was an earthquake in Virginia that was so strong most of the people along the East Coast felt it. There was an earthquake in Cuba recently that was felt as far away as Florida. The big 6.7 magnitude quake in Northridge hit on January 17, 1994. Experts say that it was the most expensive earthquake in history in terms of damages. It cost an estimated $15.3 billion in insured damages alone. When calculated with inflation increases, that would be about $24 billion if the same quake and same damages occurred in 2013. This damage amount is comparable only to Hurricane Katrina, Hurricane Andrew and the famous attacks on the World Trade Center.
Although there have not been any events as devastating as the Northridge quake, California is still the state that is most at risk for a huge earthquake. Experts say that powerful quakes are more likely to hit Southern California than any other part of the state during the next three decades. This was the finding of a 2008 study released by USC's Earthquake Center and the U.S. Geological Survey. Sixty percent of the costliest earthquakes in America have occurred in California. The figures were based on insured losses.
During the 30 years preceding the quake in Northridge, experts say that insurance companies received less than they paid out for that quake alone. Earthquake insurance costs have certainly increased since the Northridge incident, but it is still as important as ever for business owners and homeowners to have this vital coverage. Experts point out that it is not only vital for California residents but also residents everywhere. Nobody knows when or where an earthquake will happen, and it is best to be prepared instead of facing catastrophic financial losses.
It is important for homeowners to remember that earthquakes are not covered under standard American homeowners insurance policies. To obtain coverage, they must purchase separate policies from private companies. In California, residents can obtain coverage from the California Earthquake Authority, which is a publicly managed and privately funded organization. It was established in 1996 following the Northridge quake. However, they do not extend coverage to any industrial, business or commercial properties. To learn more about options and how to obtain coverage, give us a call today.