LOS ANGELES (CBS) — Less than 12 percent of California’s homeowners are estimated to have purchased earthquake insurance, despite the risk of earthquakes and tsunamis to the state.
“The potential cost of earthquakes is growing because of development in seismically active areas and the vulnerability of older buildings which may not have been built or upgraded to current building codes,” said Candysse Miller, executive director of the Insurance Information Network of California.
Earthquakes are not covered under standard homeowners or business insurance police and is a supplemental policy. In California, homeowners can also secure coverage from the California Earthquake Authority, a privately funded, publicly managed organization.
Flood damage from a tsunami also would typically be covered under a flood insurance policy rather than a standard homeowner insurance policy, Miller said. Flood policies are available from the federal government’s National Flood Insurance Program and some private insurance companies, and can generally be purchased from the same agent or broker who provides homeowners or renters insurance.
The U.S. mainland has not been shaken by a major quake since the magnitude-6.7 Northridge earthquake in 1994.
According to insured losses, the Northridge quake and the 1989 magnitude-6.9 Loma Prieta quake were the two most costly earthquakes in U.S. history. The Northridge earthquake caused an estimated $19 billion to $29 billion in insured losses,by 2008 dollars. The Loma Prieta quake cost a little over $12 billion in insured losses, the IINC reported.
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