Are You Financially Prepared for the Big One?

If we have a huge earthquake, FEMA will not be able to handle it. So, it's best to plan on taking care of yourself with the help of a huge financial risk manager: the earthquake insurance industry.

I don't know if Southern California is "overdue" for a huge earthquake; those seem to come when they come. Because we can't see precisely when it's coming and prepare, and because of the vast destruction that can ensue, I just hope the big one never happens. What worries me is that many people are much too complacent about it. 

And, it is easy to be that way. Still, take a look at Sandy: Not a strong storm (it landed weaker hurricane strength); however, it caused incredible damage to vast areas of the northeast due to most unusual circumstances and additional weather events.  And, similar to our earthquakes, not all of the damage was felt equally, with the center of the storm causing the most damage but severe damage occurring tens of miles away. 

That outcome is similar to the past large earthquakes that have occurred in California and other parts of the West Coast. Damage is staggering at epicenters, but a tremendous amount of damage occurs miles and miles away as the plates are really spread out with seemingly illogical shapes, like our gerrymandered political districts. And, it's not always the initial event that causes huge amounts of damage. Fire is a huge component along with falling objects, as people in San Francisco's Marina District and the people of New York and New Jersey discovered. 

Now, I'm not going bore you with another list of stuff you need in the event of an emergency: power substitutes, water, food, temporary shelter tents, etc.  You all know this.

But, what did you see after Sandy struck back East beside a lot of suffering? Lots of people are left without the means to replace their homes, and many homeowners and business owners didn't have flood insurance. They weren't worried about it; FEMA was supposed to take care of them. 

Those that had flood insurance are being taken care of. Those waiting for FEMA, well, they are now experiencing a bit of New Orleans' and Gulf Port's pain.  And, FEMA is essentially broke when they factor in estimates of uninsured damage. 

If we have a huge quake, FEMA will not be able to handle it.  So, it's best to plan on taking care of yourself with the help of a huge financial risk manager: the Earthquake Insurance industry. 

One of the biggest turn-offs for our clients is the deductible for earthquakes, which can be substantial. However, there is a way to minimize it: Buy back a portion of the deductible. That is what I decided to do, and for about $50 a month (in my case), I have reduced my deductible down from an enormous cost to one that can be handled. 

You can do that, too. For less than you may think, you can get adequate limits of earthquake insurance and lower the deductible, both of which enable you to reduce your financial risks. 

The time has come to handle your earthquake exposures and deductibles. 

This blog was authored on behalf of Huggins Dreckman and DRIVE RIGHT Insurance. For more information or for a quote, you can call  562-594-6541 (extension 19 for Sharon, 17 for Ronda) or email Ruby@hdinsure.com. If you'd like a preparedness report, you may also request one. 


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JustUs January 29, 2013 at 07:53 PM
Naturally an insurance man would write this article. On an average home in So. California ($400,000) I guesstimate it would cost about $300-$1000 for an earthquake policy depending on where you live (over which fault lines)? What is the deductible? 15%-20%? So the homeowner pays the first $40,000-$50,000 in damage before insurance kicks in? Stupid expenditure of money, IMO. That's why very few purchase such a policy. Federal dollars always roll after a big disaster. Those with insurance would have to pay for their own repairs. Those without insurance would get rewarded with government bailouts. This is the NEW America. Please, WAKE UP. Always follow the incentives!!! :^)
tiny January 30, 2013 at 03:57 PM
Huggins Dreckman Insurance January 30, 2013 at 11:46 PM
Yes, and look at how long it took for the Congress to pass relief legislation: 3 months after the event. And, you are right - the deductible is very high for this catastrophic protection. But, we recommend - as I did with my home - that you purchase a significant portion of the deductible back through Lloyd's and other insurers. That is called "deductible buy-back" coverage, and it's not terribly expensive.
Huggins Dreckman Insurance February 06, 2013 at 11:35 PM
Interesting article about New York. From Property/Casualty 360 daily news today, "Gov Andrew Cuomo is proposing to spend a chunk of Superstorm Sandy relief funds on buying out severely damaged homes and turning the properties into open space or flood plains. The New York Times reported Monday that the governor proposes to spend $400 million to purchase the homes and reshape the coastal landscape of New York . . . residents living in flood plains with homes that suffered significant damage would be offered pre-storm value for their houses to relocate. Homeowners in more vulnerable areas would receive a bonus of 10 percent above market value for the houses. Homes in extreme-risk areas, where all the homeowners in the neighborhood agree to sell, would receive an additional 10 percent bonus". WOW - let's see how that applies to SoCal; we'll all have to agree to move to Utah in order to get our equity out of our homes that was there in 2005. I suppose it's not a bad trade-off. Only government could come up with this one as the nation dances around the bankruptcy fires. Nero is in the palace with his fiddle.
tiny February 07, 2013 at 06:07 AM
Front line fin. report: www.youtube.com/watch?v=h1KLnbw8RQk


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