After the two earthquakes that just rocked California, residents will be disheartened to learn that yet another earthquake-related surprise is heading their way. Earthquake insurance rates are about to go way up, and that’s a trend that’s likely to continue.
The Uniform California Earthquake Rupture Forecast was recently released and it includes updated risk assessments for earthquakes in the state of California. As a result, many insurers are changing their rates to reflect the new predictions.
“We expect the eastern portions of Monterey County and the western portions of Fresno County, Kings County and Kern County to see substantial increases, while Del Norte and Humboldt counties will also see significant increases,” said California Earthquake Authority (CEA) Chief Executive Glenn Pomeroy to the Insurance Journal.
The good news is that the new rates won’t affect most of the Californian population. According to Pomeroy, roughly 75% of Californians should be unaffected. However, that remaining 25% could see their rates as much as triple.
The last two earthquakes to hit California came in at a 6.4 and 7.2 respectively. All told, insurers expect to pay out roughly $1 billion in claims related to those two quakes. Since earthquakes are only going to become more frequent and severe, it makes sense that earthquake insurance costs will rise too.
Homeowners who are paying attention do have some options to help mitigate rising rates. If they can prove to insurers that they have retrofitted their residences to protect against earthquakes they can receive discounts on their insurance policies. While every discount while very by insurer, some can go as high as 25%.
If you live in California, earthquakes are a way of life. The best thing you can do is make sure you are properly protected by purchasing the insurance policy that fits your lifestyle and your budget.
If you need a new policy, or have questions about your old one, reach out to TGS Insurance at www.tgsinsurance.com.