(As published in California Apartment Association’s Industry Newsletter)
A record number of Californians are getting earthquake insurance, and more and more cities throughout the state are passing laws to make buildings safer in a quake.
In 2016, the number of people signing up for an earthquake policy jumped more than seven-fold compared to previous years, the California Earthquake Authority just reported.
Why? The California Earthquake Authority, or CEA, said the 52,000 new policies put in force last year were the result of two things:
- Increased awareness about the threat of a major earthquake
- Lower insurance premium costs and a greater number of options available
“Perhaps Californians are considering what scientists have been saying about earthquake risks in California,” the CEA reported. “They now say there is a greater-than-99-percent chance of a magnitude 6.7 or larger earthquake, and a 93 percent chance of a magnitude 7.0 or greater occurring in California in the next 30 years.”
A magnitude 7.0 quake, the CEA said, would be three times stronger than the 1994 Northridge quake that flattened apartment complexes, overpasses and other structures.
Just as more and more Californians are getting earthquake insurance, a growing number of cities have adopted or are in the process of enacting laws requiring retrofits of buildings that are prone to damage in a major quake.
The boost in quake insurance and retrofit laws shows that the public is taking the matter seriously. We know a major quake is on its way, and we have seen the damage that can come from it.
Insurance carriers have been keeping a pulse on California’s earthquake liabilities, just as they monitor trends in fire, water damage, and a host of other life-safety issues that could leave you having to file a claim – or wishing you could – for loss, damage, or even injury or death.
Some carriers no longer insure buildings deemed to be vulnerable in a quake, but others are responding positively to retrofits and upgrades — reducing insurance rates for structures that undergo an earthquake retrofit, the California Department of Insurance reported.
For many building owners, their property represents a life-long investment; it’s their retirement plan.
According to the California Department of Insurance, anyone considering earthquake insurance should consider the following questions.
- Is your building located where earthquakes are common?
- Do you own a high-risk structure?
- Can you afford NOT to have earthquake insurance?
These are also good questions for anyone considering earthquake retrofits.
Retrofitting your building to protect against damages in a quake not only helps to guard against death, injury or damage – and the potential for subsequent liability or loss of income – it also helps to ensure the value of your investment.