I have earthquake insurance, why should I retrofit?

Yes, Insurance companies no longer pay you the Home owner the claim principal (your loss less your deductible) when your home is hit by a earthquake. As your home, unless it's fully paid off, is still owned by a bank or lending institution, they get your claim money first.

The bank then has your insurance claim monies, while you stay in a hotel or with family or friends. But what happens now? Will you immediately get your monies to rebuild? NO.

The Bank will also at this point ask you to come up with the deductible, on your house, which may be anywhere from $20,000 and up. A 10 percent deductible means the earthquake damage on a $200,000 home must be $20,000 worth of damage or more, before the insurance company pays you anything. That's a lot to come up with, before they will give you the necessary funds to repair or rebuild your home.

You must spend the deductible on repairs,and obtain receipts, before the claim principal will begin to be doled out. If you cannot come up with the deductible the bank keeps the money until you can.

This is the NEW Insurance claim method of payments, which many homeowners are not aware of. We predict many houses will be abandoned to the banks because the home owner will not be able to raise the tens of thousands of dollars of the deductible to begin repairs. Remember you won't be able to borrow it using your home as collateral; it will be too damaged.

 

Earthquake insurance is for catastrophic loss; We recommend protecting against the damage before it happens. It is enormously unlikely that a properly retrofitted home will suffer damage greater than the deductible. However, each person must decide what risks to assume. Also, visit our "retrofitting costs Page" for Tax exemptions for retrofitting. We wll be happy to discuss your individual options on request. Email us.