Berkeley CSUA MOTD:Entry 42370
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2025/07/08 [General] UID:1000 Activity:popular
7/8     

2006/3/21-25 [Science/Disaster, Reference/RealEstate] UID:42370 Activity:low
3/21    Yet Another Useless Motd Poll: .
        I own property in California and I:
        Have earthquake insurance: ..
                                    \_ My parents own, but I pay the
                                       earthquake insurance in lieu
                                       of rent.
        Dont have quake insurance: ...
        \_ Insurance is always a ripoff if you can survive without it.  And
           as most of the value is in the land anyway around here...
           \_ If you own a $600,000 home (low for the bay area) and get hit
              with $200k in damages, how are you going to survive it?  What
              if it was a total loss and your house is condemned and red
              tagged?
              \_ Earthquake insurance deductible is huge (15% of house value
                 when I last asked).  So for your hypothetical $600k house,
                 the deductible would be $90K.  So it's also a question of
                 your chances of the getting hit with >$90K or <$90K damage.
                 In the worst case, of course insurance makes sense.  But you
                 really have to look at the potential range of damage to make
                 a logical decision.
                 \_ This begs the question: Is the deductible based on property
                    value or structure value?  And if the former, is it
                    possible to get a policy/deductible for just the structure?
                    \_ Structure.  pp's didn't account for that.
                 \_ Who said the deductible is 15%?  Mine is $30k on ~$850k
                    house insured for $600k.
                    \_ let me get this right. You own a home in the Bay Area
                       that is almost 1 million dollars? Most likely it's
                       not near the mansion type you see in Texas. Why do
                       you guys even want to live in the Bay Area to buy
                       tiny little old beat up home for near 1 mil when
                       you can live in the life of luxury elsewhere? What
                       is so attractive about the Bay Area? -tired of Berkeley
                       \_ What's attractive is that if/when he decides to
                          leave, he can buy that mansion in Texas if he
                          wants to. The person in Texas doesn't have the
                          option of buying even a small house in the Bay
                          Area if he wants to and probably can't buy the
                          Texas mansion either. It's about freedom and
                          about making money somewhere with a high cost of
                          living to (later) spend somewhere else, if one
                          so chooses. It's the same reason people immigrate
                          to the USA and then go retire in their home
                          countries.
                       \_ Correct.  I live in a 'nothing special' home pretty
                          close to work that I own a large chunk of.  When it's
                          time, I'm going to sell it, make a bundle, buy a huge
                          house in a beautiful place elsewhere and still have
                          tons of cash and retire.  My counterpart in Texas is
                          going to work until he drops.
                       \_ I don't find having a huge house particularly
                          appealing.  Here I have nice weather, I'm close to
                          interesting shops and restaurants and good jobs.
                          Should I trade that to live in a huge tasteless house
                          out in the suburbs?
                          \_ Who said you should?  You should do what makes you
                             happy but don't expect anyone else to support you
                             in your old age.  I never said I had a huge house
                             in the suburbs.  I am close to my great job.  No,
                             I'm not in walking distance of interesting shops
                             but I'm not a consumer either so that doesn't mean
                             anything to me.  Go live on the beach if you want.
                             It's your life.  We all live with the consequences
                             of our earlier choices and actions.  No one has
                             told you to do otherwise.
                             \_ You don't consume?
                    \_ "Every offer of earthquake insurance must provide
                       coverage for your dwelling, for your personal property
                       (not less than $5,000 or 10% of the covered dwelling
                       loss)... CIC Section 10089(b) states that the maximum
                       deductible that can be charged is 15% of the policy
                       dwelling limit.  It is common for the deductible to be
                       the maximum 15%."
                       http://csua.org/u/fbe [<DEAD>www.insurance.ca.gov]<DEAD>
              \_ Note the "if you can survive without it" part.  We bought
                 a few years back and could survive an extra 200-300k tacked
                 onto the mortgage.  It would be hard, but we'd survive.  And
                 in the mean time, we've got $10k more in the bank from not
                 paying earthquake insurance.  And, as other posters pointed
                 out, the deductible _is_ generally huge.  -pp
2025/07/08 [General] UID:1000 Activity:popular
7/8     

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Cache (8192 bytes)
csua.org/u/fbe -> www.insurance.ca.gov/0100-consumers/0100-insurance-guides/0400-residential-series/earthquake-insurance.cfm
Reporting an Earthquake Claim Introduction While it is difficult to surpass the natural beauty of California, some say that all this beauty exacts a price. Natural disasters are part of the price we all pay for living in beautiful California. Fires, mudslides, floods, and earthquakes are a few of the natural disasters common to our state. Earthquakes in particular send a tremor of fear through most Californians. Impossible to predict, earthquakes can cause major damage to your home and personal property, not to mention the loss of human life that can occur in severe earthquakes. Earthquake insurance is one way to protect one of your most valuable assets: your home. Back to Top Earthquake Insurance Offer and Response Many property owners utilize earthquake insurance to help defray the expense of costly earthquake repairs. Residential property insurers (insurance companies that sell homeowners policies and policies for qualifying condominiums and apartments) are required under California Insurance Code (CIC) Section 10081 to offer earthquake coverage for the peril of earthquake. The mandatory earthquake offer must: * Be made in writing * Describe coverage amounts * List the deductible offered * State the policy premium You have 30 days from the date of mailing from the insurance company to accept the offer of earthquake coverage. If your homeowners insurance company does not receive a response from you, then they consider the offer rejected. Your insurance company is only required to make the offer of earthquake coverage every other year. The law prohibits an insurer from canceling, rejecting, or refusing to renew a residential property policy solely because the policyholder has accepted the offer of earthquake coverage. Back to Top Earthquake Coverage Every offer of earthquake insurance must provide coverage for your dwelling, for your personal property (not less than $5,000 or 10% of the covered dwelling loss), and for any additional living expense (ALE) of at least $1,500. You may waive ALE coverage if you or your family do not occupy the dwelling you wish to insure. CIC Section 10089 states that the maximum deductible that can be charged is 15% of the policy dwelling limit. If you desire earthquake insurance offering more than the minimum limits and a deductible less than the maximum established by law, then you may contact your current residential property insurer or earthquake insurer to see if higher limits or lower deductibles are available. Stand-alone policies are offered by a few specialty insurance companies who do not require you to purchase your homeowners insurance from them in order to offer you earthquake coverage. They offer a stand-alone policy, which is referred to as a monoline policy (one line of insurance) by the insurance industry. ALE coverage is designed to pay for the cost associated with living somewhere else while repairs are being made to your home. Typically your insurer will cover increases in your normal living expenses to help you maintain the standard of living you had before an earthquake damaged your home and personal property. ALE coverage can include costs for the following: * Temporary rental home, apartment, or hotel room * Restaurant meals * Telephone or utility installation in a temporary residence * Relocation and storage * Furniture Rental * Laundry Payment on ALE coverage is limited to the reasonable time required to repair or rebuild your home, or for you to permanently settle in another residence. It is important to note that ALE only covers the extra amount you have to pay in order to maintain your normal standard of living while outside your home. ALE coverage can also pay costs you may incur due to the police or other civil authority denying access to your home in the event of an evacuation. Back to Top California Earthquake Authority (CEA) The CEA was formed to provide earthquake insurance to residential property owners including homeowners, individual condominium unit owners, mobile homeowners, and renters. Under the CEA plan, the CEA member insurance company is required to offer earthquake coverage subject to the minimum dwelling and personal property requirements as outlined in CIC Section 10089 and as discussed in the "Earthquake Coverage" section of this brochure. Your dwelling must be covered according to the CEA policy guidelines; however, other structures such as outbuildings, swimming pools, and masonry fences are specifically excluded (as is the case with the majority of earthquake policies). The CEA has more recently offered broader coverage in response to growing claim reserves and positive reports of plan solvency. You cannot purchase earthquake coverage directly from the CEA. Only licensed California insurers who are CEA member companies can sell CEA policies. You must have a residential property policy in-force or be purchasing a new residential property policy from a CEA member insurer in order to be offered a CEA policy. The residential insurance companies participating in the CEA currently underwrite over 70% of the residential property insurance sold in California. A participating CEA company can only offer CEA policies. Back to Top Special Earthquake Provisions Insurance companies are required to offer earthquake coverage even if your property does not meet current Building Code and Health and Safety Code requirements relating to foundation anchor bolting and water heater bracing. However, your insurer may charge additional premium and/or an increased earthquake deductible if this is the case with your dwelling. Also, your insurance company must disclose any available discounts (such as retrofitting) for earthquake hazard reduction to your property in writing. Retrofitting acts to strengthen your home to minimize future earthquake damage. Many consumers have utilized earthquake retrofitting as another way to be as prepared as possible for an earthquake. In some cases taking simple steps such as bolting your wood frame home to the foundation can save your home from severe earthquake damage and can reduce your earthquake insurance premium. Residential retrofitting includes, but is not limited to the following: * Anchoring a dwelling to its foundation through seismic bolting * Reinforcing and/or bracing the fireplace chimney * Securing and bracing the water heater to the dwelling frame * Installing automatic gas shut-off valves * Installing bracing for sheer walls If your dwelling has been completely retrofitted as verified by your insurance company, you must be offered $10,000 coverage for reconstruction costs to bring your dwelling up to current building codes as required for approval of the reconstruction permit after an earthquake. Back to Top Proximate Cause Sometimes an earthquake and/or its aftershocks can cause other events to occur that result in damage to your property. When an earthquake triggers other property losses (such as a bursting water pipe), the earthquake is referred to as the "proximate cause" of the damage, not the "direct cause." CIC Section 10088 states that unless earthquake coverage is in-force at the time of an earthquake, the resulting loss is not covered, even if the direct cause is a covered peril under your residential property policy. This section does not prevent an insurance company from specifically providing coverage for direct loss due to explosion, theft, or glass breakage resulting from earthquake when an endorsement or earthquake policy does not exist. Read your policy and contact your insurance company whenever you experience a property loss due to an earthquake. Do not assume that the damage to your property is not covered. Back to Top Reporting an Earthquake Claim Knowing what to do in the aftermath of an earthquake property loss or any property loss can help you deal with the claims process in the most efficient way possible. As with all insurance claims, an earthquake claim needs to be reported to your insurance company as soon as possible. Your insurance company is required to open a claim upon your notice that a claim has occurred. Insist on being assigned a claim adjuster, and report any refusal to open a claim to the C...