Earthquake Insurance for the Inevitable
When people buy different types of insurance, they don’t know if they’ll ever get into a car accident, or if their home will be damaged by fire, or if they’ll ever experience a medical emergency. Those types of insurance are a matter of “if” or “maybe.”
But earthquake insurance is different.
Because in California, it’s not a matter of “if” or “maybe” a major earthquake will strike, but when. That’s why helping your policyholders be earthquake ready should be at the top of your to-do list.
A “Tectonic Time Bomb”
One of the active earthquake faults scientists are keeping a nervous eye on is the Hayward fault, which runs along San Francisco’s East Bay.
On October 21, 1868, an estimated M6.8 to M7.0 earthquake struck the fault. At the time, the population in the Bay Area was around 260,000 people.
Today, the Bay Area population is over 7 million people, with some 2.5 million living along the fault. According to U.S. Geological Survey (USGS) scientists, the Hayward fault is a “tectonic time bomb,” set to go off any day now.
History shows that five large earthquakes on the Hayward fault have occurred on average every 150 years, with October 21st marking the 150th anniversary of the 1868 quake. If history is any indicator, the Hayward fault is due for another large earthquake.
The HayWired Scenario
On April 18th, the USGS and its partners—which includes CEA—presented to the public the HayWired Scenario, a hypothetical earthquake scenario which imagines a M7.0 earthquake centered in Oakland, California, rupturing the Hayward fault along its length for about 52 miles. As a result, there is strong ground shaking and a range of severe impacts throughout the region.
It’s estimated that more than a million homes would be damaged by shaking if the HayWired Scenario earthquake were to actually occur. Unfortunately, with only a 10% take-up of earthquake insurance in California, very little of the residential damage caused by shaking would be covered by insurance.
As a result, many Bay Area residents would face significant out-of-pocket costs to repair their homes, replace their belongings, and live and eat meals away from home if they were displaced by earthquake damage.
Of course, an earthquake can happen along any fault in California, making the HayWired Scenario just one of many that could occur. Which is why no matter where your policyholders live in California, they need to be earthquake ready.
A Damaging Earthquake Could Happen Today
Before the next damaging earthquake – while there’s still time – there are several things you can do to help your policyholders get prepared:
- Introduce them to The Seven Steps to Earthquake Safety. As their trusted insurance advisor, you’re in a unique position to help educate about earthquake risk and to offer advice.
- Show them how they can prepare their house to reduce earthquake damage, including seismic retrofitting (which may qualify them for a CEA premium discount).
- Help your policyholders understand the benefits of having a CEA earthquake insurance policy and get them the coverage they need.
We don’t know when the next damaging earthquake will strike. Reach out and help your policyholders get prepared today.
For additional media coverage of the HayWired Scenario, visit In the News.