Homeowners gamble without earthquake insurance
Oakland Tribune, Apr 25, 2005 by David M. Drucker, SACRAMENTO BUREAU
SACRAMENTO — Tougher bankruptcy laws and skyrocketing home values have increased the necessity for earthquake insurance even as trends show fewer and fewer California homeowners are purchasing coverage, officials say.
Over a decade after record, devastating earthquakes rocked Northern and Southern California, less than 15 percent of homeowners have earthquake insurance.
Yet, with the new federal bankruptcy regulations signed into law last week by President Bush and the escalation in home values generating billions of dollars in equity for homeowners, now is exactly the time when the purchase of earthquake coverage should be rising.
“Many people, after an earthquake, walk away and declare bankruptcy. But that’s changing, too, after (Wednesday’s) signing of the new bankruptcy laws,” said Pete Moraga, spokesman for the Insurance Information Network of California. “And if you have a home and have built up equity, it’s ludicrous not to have it. It boggles the mind.”
The Loma Prieta earthquake rocked the Bay Area in 1989, followed by Los Angeles County’s Northridge quake in 1994. Losses from the Northridge quake alone equal $16 billion in 2005 dollars.
Insurance experts say it’s typical for the purchase of coverage to drop with the passing of time since the last major earthquake
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