Daybreak jolt in L.A. sounds alarm for earthquake insurance
The St. Patrick's Day earthquake in the Los Angeles area woke up residents with a 4.4-magnitude rumble, and though no injuries or severe damage were reported, the jolt also serves as a wake-up call for the importance of having 'quake coverage.
Standard homeowners insurance doesn't cover property damage caused by shaking earth movement, but you don't need the luck of the Irish to score a discount on earthquake insurance if you live in Southern California.
The California Earthquake Authority (CEA), California Insurance Commissioner Dave Jones and the Automobile Club of Southern California (AAA) recently announced a new multi-policy discount for qualifying homeowners that includes earthquake coverage. The CEA is a privately funded, publicly managed organization that offers earthquake insurance through participating insurers.
Under the agreement that went into effect Jan. 1, Auto Club members who insure single-family homes through the club's affiliate insurer and also buy or renew a CEA earthquake policy get a home insurance discount of up to 7 percent.
News of the bundle discount comes at a time when only 12 percent of California homeowners have earthquake insurance, either from a private insurance company or the CEA, according to the Insurance Information Network of California.
"Efforts such as this first-of-its kind discount are important incentives to encourage more homeowners to protect themselves against the potential for devastating loss," Jones said in a written statement. "In California, it's not a question of if, but rather when the next big earthquake will strike. Living in earthquake country means taking steps to protect your biggest asset from damage and loss."
CEA policies from participating insurers typically carry deductibles of 10 percent to 15 percent, provide personal property coverage from $5,000 to $100,000 and loss of use coverage from $1,500 to $25,000. Private insurers in California may offer different coverage limits. The CEA website has a coverage calculator that lets you figure out estimates of what your CEA policy will cost.
Des Toups is a writer, editor and expert on insurance, cars and personal finance. He has written extensively about all three for national publications such as MSN and major newspapers such as the Seattle Times. He has been quoted about insurance issues in The New York Times, USA Today and Kiplinger's. Follow him on Twitter @destoups.