Most Californians Say No to Quake Insurance
Information for Buyers

(April 12, 2006) --   On the eve of the 100th anniversary of the devastating 1906 San Francisco earthquake, insurers say that only 14 percent of California home owners have earthquake policies.

"They're playing Russian roulette,” says Robert Hartwig, chief economist for the Insurance Information Institute, a trade group.

Insurance carriers must offer earthquake insurance to California home owners and the state’s insurer-funded California Earthquake Authority also offers it. But Californians prefer to go bare, even though the U.S. Geologic Survey estimates a 62 percent probability of a magnitude 6.7 or greater earthquake capable of causing widespread damage striking the San Francisco area before 2032.

Earthquake insurance is costly and the deductibles are high, which is probably why many people avoid buying it. But were a temblor similar to the 1906 earthquake to strike the area, many people might regret their frugality.

There would be estimated insured property losses of $80 billion and total property losses would top $300 billion, according to disaster risk-modeler AIR Worldwide Corp.

Source: Reuters News, Jim Christie (04/12/2006)