Californians Get Wakeup Call with 5.4 Quake

Only 12 percent of California homeowners currently own earthquake insurance policies, potentially leaving millions of Californians financially unprotected in the event of a catastrophic quake.

“Historically, the longer California goes between major quakes, the more homeowners drop their earthquake coverage,” said Candysse Miller, executive director of the Insurance Information Network of California. “Without a financial recovery plan, homeowners should expect to be hit by financial aftershocks in the event of a major quake.”

Though Tuesday’s Chino Hills temblor caused only minor damage, it was the first sizable quake to strike a Southern California metropolitan area since the 1994 Northridge earthquake. At the time of the Northridge quake, nearly 30 percent of California homeowners purchased earthquake coverage.

IINC research has indicated that Californians may errantly believe that their homeowner and renters’ insurance cover earthquake damage. Past surveys by IINC revealed that far more Californians believed they had insurance for earthquake and flood damages than actually purchased the policies. Like flood insurance, however, earthquake coverage is purchased separately from standard homeowner and renters’ policies.

In 2006, an IINC poll found that 31 percent of Californians believed they had earthquake insurance, when sales trends indicated that fewer than 13 percent of California homeowners had earthquake coverage. Today, roughly 88 percent of California homeowners reject earthquake coverage.

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

“Financial preparedness is a key and often overlooked part of disaster readiness,” Miller said. “It may sound like a chore, but understanding your insurance coverage is a critical step in protecting your home and assets.”

IINC offers a number of free Web-based tools to help consumers track and evaluate their insurance and finances, including software to create a home inventory, track financial goals and create a wallet-sized insurance information card.