Despite the risk that is present in that part of the country, very few homes and businesses are covered.
Even though Californians live in a state that is known to be located on active fault lines, the vast majority of residents and business owners still are not buying earthquake insurance.
This fact came into the spotlight as a quake shook the Napa Valley region over the weekend.
Northern California was shaken by a 6.1 magnitude tremor early on Sunday, taking people in populated areas quite off guard. Fires started, buildings were damaged, utility lines were broken, and at least 120 people were injured. Among them 6 are in critical condition. There is an ongoing risk of this type of event, and yet despite that fact, earthquake insurance covers only 6 percent in this part of the country.
It is too early to know the total cost of damages or how much earthquake insurance will cover.
According to experts, it will take more time before this type of exact dollar figure can be measured. That said, the U.S. Geological Survey has released an estimate that has said that the economic impact of the quake will likely be even greater than $1 billion. Still, this type of risk doesn’t seem to be enough to encourage homeowners to purchase the pricy coverage.
Surveys have revealed that the percentage of property owners across the United States who have home quake insurance policies is actually on the decline. In May, The Insurance Information Institute (I.I.I.) determined that in the western U.S., only 10 percent had this type of coverage. When last year’s figure at 22 percent is taken into consideration, it is clear that these policies are falling out of favor among consumers, despite the risk.
Across the entire country, only 7 percent have this type of coverage. This is a drop of 3 percent over the percentage that was recorded last year. The surveys showed that consumers within the higher income ranges have a notably greater likelihood of purchasing earthquake insurance than those whose incomes are lower. While there is no requirement in California for homeowners, building owners, or renters to purchase these policies, coverage against quake damage is typically not included in standard property policies.