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How the Near-Disaster of the Oroville Dam Has Everything to do with Earthquake Insurance

At first glance, one may wonder how this month’s emergency surrounding the Oroville dam could have anything to do with CEA or earthquake insurance. But when you look past the news reports—of the dam’s infrastructure or the thousands who were told to flee their homes with a five-minute head start, a heads-up unheard of with earthquakes—you can find more similarities than differences.

Losing a home is one of the worst things that can happen to a person. This is true whether it is from a natural disaster or not.

When the effects of the Oroville dam’s possible consequences are seen as both emotional and financial, we then begin to see how similar Oroville and CEA can be.

The San Francisco Chronicle summarizes it best: “The near-disaster at Lake Oroville last week shows once again why homeowners and renters might consider buying flood insurance, even if their lender does not require it.”

Sound familiar? Earthquake insurance is not required to get a mortgage, even in the most high-risk areas. In fact, the article reports that many of the people who were working to get flood insurance for their homes had homes that were not “in a high-risk zone.”

Let’s be clear: This does not mean insurance isn’t necessary. It just that it is not legally required.

As with Oroville, it shouldn’t matter if it’s required to purchase or not. Homeowners should get earthquake insurance, to cover their homes and belongings, and to protect their finances—before the next earthquake hits.

For these people buying flood coverage, their new policies were purchased too late—there is a 30-day waiting period before the insurance takes effect. Keeping that in mind, it’s best to communicate the benefits of earthquake insurance to your clients now, before it is too late.

Here’s another parallel between flood and earthquakes: “A standard homeowners or renters policy does not cover flood damage. It must be purchased separately, usually from the National Flood Insurance Program, which sells policies through insurance agents.”

Many of your clients who have purchased their homeowners insurance through you or your agency likely think that policy also covers earthquakes. Help defeat this myth!

Tell your clients directly: without a separate earthquake policy from CEA, they will be responsible for all repair and rebuilding costs related to damage from an earthquake, including the cost to live elsewhere while their home is being repaired or rebuilt. This means they will be responsible for 100 percent of recovery costs.

To quote Sushil Kumar Kairam, who bought coverage for two homes, two duplexes and a liquor store, all near the Oroville dam but none in high-risk zones: “Better to be safe than sorry.”

Be a trusted advisor to your potential CEA clients and help them get safe—before it's too late.