The hope is to make the coverage more affordable so a larger number of homeowners will buy it.
The leading barrier to the purchase of California earthquake insurance is its cost. It is an expensive form of additional coverage. Many homeowners feel it is simply out of their financial reach.
CEO Glenn Pomeroy of the California Earthquake Authority says homeowners feel the premiums are too high.
That said, Pomeroy also spoke to real estate agents in Santa Rosa this week and explained that his organization has new options. Homeowners frequently believe deductibles and premiums for California earthquake insurance are too high to make their coverage worthwhile. They don’t see the value at that price. The out of pocket costs are also too high to be worth it in their eyes. Pomeroy described new options that would let homeowners find a policy that suit their specific needs.
Pomeroy spoke at the North Bay Association of Realtors. “This year, people ought to give earthquake insurance a second look,” he said.
That authority is working with 80 percent of the California earthquake insurance companies.
A solution for the lack of earthquake insurance in California may be more important than many people think. At the moment, about 90 percent of homeowners in the state do not have the coverage. They are covered for fire, theft and other perils, but most do not have protection from tremors.
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Should a major quake occur, many of those homeowners would lose everything. After all, a house is typically the largest investment in a person’s life and all that person’s possessions are typically contained within it.
When combined with the fact that scientists are now predicting that a major quake is headed to California within most of our lifetimes, this is a massive problem. There is a 99 percent certainty that a 6.7 magnitude or greater quake will hit the state inside the next 30 years.
Now, organizations are doing what they can to encourage homeowners to purchase California earthquake insurance. It is a matter of both expanding the current coverage offerings and showing how real the risk currently appears.