California State University, Fullerton

News Categories

Orange County Register

Earthquake Insurance Can Help You Bounce Back After a Quake

April 17, 2014

In 1994, 33 percent of California residences were protected with earthquake insurance. That number is down to 11 percent, according to California Earthquake Authority.

Weili Lu a finance professor and director of the Center for Insurance Studies at Cal State Fullerton, advises in favor of having insurance.

“We are an earthquake state,” she said. “Two thirds of the earthquake risk in the United States is in California. Since we live in this place filled with earthquake risk, in order to conduct risk management for ourselves we need to include earthquake insurance.”

She suspects that many California homeowners veer from earthquake insurance because of the high deductible.

“Shop around for deductibles,” she said. “It really depends on your coverage. If you have good coverage, the deductible will probably be smaller. The higher your deductible, the lower your premium. You can always try to balance it with your budget.”

While many are wary of the cost, Lu said much goes into determining the price, such as where the consumer lives or which company they buy insurance from.

According to California Earthquake Authority, homeowners’ earthquake insurance premiums are calculated according to the dwelling’s insured value, location, construction-type, foundation, age and number of stories, as well as the policyholder’s coverage choices.

Continue reading.

Tags:  Media