Transcript Quake Insurance for Homeowners and Renters: A Waste of Money or a Bay Area Necessity? July 29, 2009 BayQuake Alliance Meeting Speaker: Emily Cabral, Program Coordinator 11/7/2015

Quake Insurance for
Homeowners and Renters: A
Waste of Money or a Bay Area
Necessity?
July 29, 2009
BayQuake Alliance Meeting
Speaker: Emily Cabral,
Program Coordinator
11/7/2015
About United Policyholders




A 501(c)(3) non-profit founded in 1991 that helps
solve insurance problems and advocates for
fairness and integrity in insurance transactions.
Our work is funded by donations and grants.
We have a large network of volunteers and
limited paid staff.
Our website offers extensive resources and
information free of charge. www.uphelp.org
18 years of experience:





Helping individuals and businesses navigate the
insurance claims process
Helping property owners and communities recover from
natural disasters
Monitoring the insurance marketplace, claims practices
and legal developments
Advancing policyholders’ interests in courts of law, public
policy forums and the media
Working with regulators and elected officials
Three main program areas:

Roadmap to Recovery™ [Post-disaster] Tools
and resources for disaster victims, case
managers/aid workers.

Roadmap to Preparedness [Pre-disaster] Tools
and resources aimed at promoting financial
preparedness and loss mitigation.

Amicus Project and Advocacy work [Legal
and Other]
The Big One and the Big Question:
“To buy, or not to buy…”

If you own a home in a quake-prone region and
you can afford it, the safest way to protect your
investment is to retrofit and buy earthquake
insurance.

If you rent in a quake-prone region and want to
protect your property, EQ insurance is easy to
shop for and (relatively) reasonably priced.
The decision whether or not to buy EQ
insurance is an individual, financial decision
Key factors:
 Financial strength of the companies that will sell
it to you,
 Deductible, cost, coverage
 Amount of equity
 Proximity to a fault zone
 Age, style, location
 What’s excluded under the policy
Future shock:
There is over a 60%
Financial Preparedness To Do’s
Step1: Your most important documents include:







Insurance Policies and Related Correspondence
Passports and Birth Certificates
Family Photos
Tax and Loan Documents
Stocks and Bonds
Wills and Trusts
Plans/Blueprints of Your Home
Financial Preparedness To Do’s
Step 2: Store these items in an
earthquake-safe file or electronic
document.
 Extra Credit: INVENTORY YOUR HOME
In the even of a total loss, your insurance
company will make you itemize every
single item in order to receive you policy
limits. (www.uphelp.org)

Assess your risk profile
Visit www.abag.ca.gov to get info about
the EQ risk where your dwelling is located
 Know the basic construction
characteristics of your dwelling:

 Age
 Style
of construction
 Site characteristics
Can you afford not to have it?

Buy coverage only when the lack of it will
create a financial burden. Decide at what
level of loss — $25,000, $50,000, or
$100,000 — the repair (or rebuilding) of
your home would become an
unacceptable burden:

Then do the math…
Can you afford not to have it?
 What is your Replacement Cost Value?
(homesmart reports, accucoverage, a contractor friend)

•
•
•
What’s the Damage?
Home Damage or destroyed: 10%-100%
Contents: up to 20%
Relocation costs: $500/wk.
Remember how much you paid for your home is irrelevant
to how much it will cost to rebuild your home
Rule of Thumb

A generally accepted rule of thumb is that
you should not risk more than 10 percent
of your liquid assets.
Shopping basics:

Contact a reputable insurance company with whom you have a
homeowners or renters insurance policy, and ask for an earthquake
insurance quote. This will have be an additional rider or floater policy
to your regular insurance. Follow the links at www.uphelp.org to
check out their financial strength/ratings.

Get and compare earthquake insurance quotes from at least three
companies. Online sources include www.insweb.com,
www.insure.com

Determine which company offers the best deal, contact a
representative and make sure to discuss your specific coverage
needs.
A 100% deductible or 10%?

Policies with 10% as opposed to the standard 15% deductible are
now available but of course they're more expensive. The price and
high deductibles for EQ policies has led many people to avoid
buying the product, but remember; if you live in a quake-prone
region, going "bare" with no insurance means you have a 100%
deductible…you'll bear the entire risk yourself.

Don't assume that FEMA, the SBA and/or private charities will bail
you out with funds to rebuild after a major disaster.

FEMA has very limited funds and strict eligibility criteria.
SBA loans are modest and must be repaid. Private charities are
being severely stretched by an ever-increasing demand for their
services.

Key messages:





Adequate private insurance is essential
Government and charitable aid programs will not
cover the cost of rebuilding a destroyed home
Take your insurance papers if you evacuate
Oral promises by insurance reps that you’re fully
covered are useless if you can’t prove them later
Inflation protection features generally do not
protect you against rising costs
2 Tips for after the Big One
If you do not have EQ Insurance:
 Report your damage anyways.
Your “denial letter” is your documentation that
your damage is uninsured and you will now have
access to:
- FEMA free grant money (up to $28,000)
- SBA loans, (200,000 for dwelling, 40,000 for
personal property)
2 Tips for after the Big One
If you have EQ insurance:
 Bring your dec. page to the federal recovery
center to receive aid for your deductable. An aid
worker will ask you if you have insurance.
 If you say yes, they will tell you to go to the back
of the line.
 If you say, yes however I need assistance with
my deductable which is considered an uninsured
loss, and show them your declaration page, they
will help you with assistance.
For More Information:

Visit UP’s website and search for more
claim tips, articles and helpful info at:
www.uphelp.org