What The San Jose Earthquake Is Teaching Us

The 5.1 magnitude earthquake on Oct 25th was just 12 miles from the third largest city in California by population, found many California homeowners shopping for earthquake insurance. Less than 15% of homeowners carry earthquake insurance in the state known as “earthquake country.” Serving all of us a reminder with the quake in San Jose that the “Big One” may be next. Protection for what is to many their biggest asset, from a danger that in many areas of California is even more likely than a wildfire. This seems like a logical thing to do when they are reminded with a magnitude 5.1 earthquake. However, it gets challenging for earthquake insurance shoppers after an earthquake of magnitude 5.0 or greater. Some companies that issue coverage for earthquake have a moratorium clause that takes effect by stopping new business transactions. The reason is that a more powerful aftershock may follow, and insurance companies are always looking to mitigate risks and keep losses low. Californians who are hundreds of miles away from the epicenter of the 5.1 earthquake are even challenged from purchasing earthquake insurance from some earthquake carriers.

So can you buy earthquake insurance today?

Luckily, the magnitude of this quake did not stop all the companies from issuing new policies for earthquake insurance. But, we can recall not too long ago, the Ridgecrest earthquake sequence of M6.4 on July 4th and M7.1 on July 6th of 2019 resulted in many of the biggest named home insurers in California who place earthquake insurance through the CEA, putting a moratorium on new policies being issued for earthquake insurance. The result was a nasty fight, with the CA insurance commissioner’s office on one side attempting to force the insurance companies to issue policies and the CEA participating insurers holding their ground by any means as the danger of a big aftershock was greater than ever.

What homeowners and landlords can do

Buy earthquake insurance today. Yes, that is the best answer for all types of homes, new and older built. Retrofitting older homes does help reduce damage and can help the home sustain certain magnitude earthquake shock, however, more is needed for a big earthquake close to the city like San Jose or Los Angeles. Of course, retrofitting your home can mean additional benefits, such as discounts on your earthquake insurance policy of up to 25% and, the state of California has programs to help pay for retrofitting your home.

How we can help you shop for earthquake insurance during these times

We compare earthquake companies for the coverage you are looking for and offer you the selection of the best policies and most competitive rates from private standalone earthquake companies and the CEA. But what if the best option for your earthquake policy is from a carrier? The best solution we offer for our customers during these challenging times is placing their policies with a carrier that accepts business now, and move their policy over once the moratorium is lifted.

Having a conversation with our professionals is a great place to start for protecting your most precious asset, your home. We look forward to speaking with you.