Small Percent of Californians Have Quake Coverage

Less than 12 percent of California homeowners own earthquake insurance policies, and even fewer small business owners have purchased quake coverage, leaving millions of Californians financially unprotected in the event of a catastrophic earthquake.

Scientists today released a report outlining a likely 7.8-magnitude quake scenario along the San Andreas Fault. The quake is projected to level communities, water networks and freeway systems, as well as killing and injuring thousands of Southern Californians. The report is the scientific framework for “The Great Southern California Shakeout,” a massive earthquake preparedness drill scheduled for Nov. 13.

The hypothetical quake is projected to cause more than $200 billion damage. The most recent major California earthquakes, the 1994 Northridge and the 1989 Loma Prieta temblors, caused $20 billion and $12 billion in insured losses respectively, adjusted for 2007 dollars.

Polling commissioned by the Insurance Information Network of California has consistently found that far more Californians believe they have earthquake insurance than have actually purchased it. This may indicate confusion over homeowner insurance coverage, said IINC Executive Director Candysse Miller.

“Earthquake damage is not covered under a standard homeowner insurance policy, and must be purchased separately,” Miller said. “With a catastrophic earthquake a near certainty in the next few decades, far too few homeowners have a financial recovery plan in place. The result could be billions of dollars in uninsured damage to homes and small businesses.”

A 2006 IINC poll also found that less than half of Californians consider themselves prepared for an earthquake.

Earthquakes have occurred in 39 states and been felt in all 50 states. About 5,000 quakes occur across the United States each year.