Who Should Purchase Earthquake Insurance

You’re concerned about a Bay Area-style temblor rocking Southern California. But is earthquake insurance too expensive or a rip-off? What else can you do to minimize the potential damage to your home in a quake?

Indeed, quake insurance is expensive, and unnecessary and unfairly priced for some homeowners. But some property owners, nonetheless, should seriously consider getting it.

The typical premium is around $2 for each $1,000 of coverage, with a 10% deductible applied separately to the structure and internal contents. So, for a $200,000 home, the premium would average $400, with a whopping $20,000 deductible. (So far there are no widespread reports of premium increases following the Bay Area quake, but some are expected.)

Premiums are higher for high-risk structures, such as unreinforced masonry (a rarity among single-family homes in Southern California), split-level and two-story homes, or homes with unusual, non-box-like designs.

Premiums also are higher for homes in high-risk areas, such as those near fault lines, in coastal areas, on hillsides, or on sandy soils or landfills such as in the Marina area of San Francisco, where many homes were destroyed.

There are several good arguments not to get quake coverage:

- Conventional wood frame or stucco homes--typical in Southern California--hold up well if they are built on firm ground. Most homes built since the 1950s also are bolted to their foundations to prevent slipping.

- Most homeowner policies will cover damage that might accompany a quake, such as from fire, water or broken windows.

- Earthquake policies typically exclude chimneys, brick facades, concrete walls--things most likely to be damaged.

- If the Big One hits, the government will provide relief anyway.

Many of these arguments are valid. Still, you might want to get a quake policy anyway. First, federal relief may be limited. Early indications from Northern California and previous experience indicates that some earthquake victims may not get enough aid to cover the cost of their homes. And if they receive loans, those presumably will have to be paid back.

Also, the purpose of insurance is to protect yourself against catastrophes, not nuisances. If you have no other major assets except your home, quake insurance may be worth it for added peace of mind.

“People who need it are those who have their whole life savings invested in their home,” says Joe Annotti, spokesman for the Independent Insurance Agents and Brokers of California.

If you are among the one in five Southern California residents that already has earthquake insurance, the Bay Area experience has yielded some key tips for how to respond if a temblor hits. Take pictures of broken contents and other damage, Annotti suggests. That way you can clean up and get on with living, and still prove your claim. Also, if you have any doubt about structural damage, call your agent and have the insurance company inspect the property just in case.

Whether or not you have insurance, there are many other things you can do.

First, inspect your home to see that it is attached to the foundation with sill bolts or some other reinforcement. This can be done by simply going into the crawl space of your house because such supports are easily visible, says David Breiholz, a civil engineer and chairman of the hazardous buildings committee of the Structural Engineers Assn. of Southern California.

If you don’t trust your judgment or want a more comprehensive checkup, call a competent home builder, contractor or experienced handyman. You can also call the Structural Engineers Assn. of Southern California at (213) 385-4424. They will send you a list of structural engineers in your area, if you live in Los Angeles, Orange, Riverside, San Bernardino, Ventura or Santa Barbara counties. In San Diego County, call the Structural Engineers Assn. of San Diego at (619) 223-9955.

However, these professionals can be expensive; many charge as much as $100 an hour.

If you find your home needs reinforcement, doing it yourself may cost you less than $100 for materials, Breiholz says.

Having a professional do the work may cost between $500 and $1,000, he says.

Other common steps you should take: brace your water heater to the wall with galvanized plumber’s tape to prevent it from falling; brace shelves, display cases and other fixtures to walls; and make sure household chemicals, flammable materials and other dangerous items are stored safely.

Bill Sing welcomes readers’ comments and suggestions for columns but regrets that he cannot respond individually to letters. Write to Bill Sing, Personal Finance, Los Angeles Times, Times Mirror Square, Los Angeles, Calif. 90053.