A state of emergency was declared in Southern Napa County on Sunday after the strongest earthquake to strike Northern California in 25 years hit in the early hours of the morning. Registering a 6.0 magnitude, it is the largest trembler in the area since the 6.9-magnitude Loma Prieta earthquake caused $6 billion of property damage in 1989.
The U.S. Geological Survey’s automated economic loss software predicted a 27% chance losses will exceed $1 billion. Fires broke out, water mains burst, areas of buildings crumbled, gas lines ruptured, and at least 15 buildings were left uninhabitable. What many people may not realize is this damage may not be covered by many standard homeowner’s insurance policies. While all residential property insurance companies are required by California law to offer earthquake coverage, it most often requires purchasing additional coverage.
Even if a homeowner has a policy covering earthquake damage, it is important to know what is and is not covered. For instance, the standard policy sold by the California Earthquake Authority, which provides about 70% of all Earthquake policies sold in the state, is based on a "mini-policy" established by a 1996 act of the California Legislature that covers the insured’s dwelling to provide "a roof over your head" but does not cover damages to things like detached structures, pools, or patios.
If you are one of the many Californians affected by this disaster, or want to know what your situation is for future quakes, now is a good time to review the coverage provided by your policy. You can get great advice on what to look for from this blog post by my colleague, Denise Sze: Recent Earthquate Swarms Bring Rising Concern Over Insurance Coverage Deficit in Southern California.
As with any losses that would require making an insurance claim, property owners should accurately record and take steps to mitigate any damage and contact their insurance agent as soon as possible—the sooner you get the ball rolling on your claim the sooner you may receive the funds you need to repair or rebuild and move on.