Author Topic: Buying Earthquake insurance mainly for relocation expense?  (Read 2692 times)

Unionville

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Buying Earthquake insurance mainly for relocation expense?
« on: February 06, 2018, 02:13:39 PM »
I can get a low cost, high deductible Earthquake insurance ($100 a month/$30,000 deductible) and I was thinking of getting it mainly for temporary relocation costs. Our house is tiny, one level and has a good foundation, so I doubt we'd get $30,000 worth of damage -- BUT, if had to move somewhere temporarily because of damage, it would be crazy expensive where I live. I could easily see paying $400 a night for a hotel -- In fact they cost that much now.  We are way overdue for a large earthquake so we are high risk and I'm sure all the water/utilities will be out for a month or so. That could easily be $12,000 a month relocation cost (while we fix the house)
« Last Edit: February 06, 2018, 02:20:27 PM by meteor »

Sibley

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #1 on: February 06, 2018, 02:44:39 PM »
Do you have a tent?

Cowardly Toaster

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #2 on: February 06, 2018, 02:51:45 PM »
$100 a month for earthquake insurance? As long as you live on firm ground (not Anchorage Alaska where the unstable swampy ground sinks during the biggest quakes) I really don't know why you'd pay that.

A small house will be incredibly strong, and I assume it is a stick frame? I wouldn't worry about it. But have a plan and a couple weeks of food and a water source.

Unionville

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #3 on: February 06, 2018, 03:42:35 PM »
Do you have a tent?
  Yes, several tents are in our emergency earthquake bin -- but living outdoors in the backyard without running water, heat, or electricity and cooking on a camp stove gets old fast in the city.  Especially if you have to repair a house and find workmen at the same time.

Sibley

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #4 on: February 07, 2018, 07:31:14 AM »
If there's an earthquake, the biggest risk isn't structural damage. It's fire. Last I looked into it (been a long time, I'm out of earthquake zone now), the earthquake policies didn't cover fire damage, that was standard homeowners. You'd need to confirm that though. And if there's a fire, then standard insurance should cover temporary housing.

Plus, in there was an earthquake you'd probably be one of thousands of people in the same boat and there'd be some sort of messy solution. That's assuming that hotels had power and water too, or were undamaged. There's too many ifs here.

cchrissyy

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #5 on: February 07, 2018, 10:14:00 PM »
Sibley - that is exactly why I don't have earthquake insurance.

My normal policy covers fires and other disasters that are caused by earthquakes. The separate policy would only cover direct damage from shaking, and the price was much too high for the value I might receive after a heavy deductible, so I turned it down.

jamesbond007

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #6 on: February 07, 2018, 10:29:11 PM »
Posting to follow. I just bought earthquake insurance here in the SF Bay Area. It cost me around $850 for the whole year via AAA. Part of me says I don't need it. But I feel like protecting my hard earned home. Not sure if I was thinking straight. I regret it sometimes, but the risk seems bigger.

kimmarg

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #7 on: February 08, 2018, 05:02:21 AM »
I can get a low cost, high deductible Earthquake insurance ($100 a month/$30,000 deductible) and I was thinking of getting it mainly for temporary relocation costs. Our house is tiny, one level and has a good foundation, so I doubt we'd get $30,000 worth of damage -- BUT, if had to move somewhere temporarily because of damage, it would be crazy expensive where I live. I could easily see paying $400 a night for a hotel -- In fact they cost that much now.  We are way overdue for a large earthquake so we are high risk and I'm sure all the water/utilities will be out for a month or so. That could easily be $12,000 a month relocation cost (while we fix the house)

I think you have your answer above. You donít need insurance, you need preparedness. Insurance is to cover a financial hit you canít take. I insure my home because I donít have $150k to replace it. You state above that you doubt your home would incur damage over the deductible so by definition you donít need insurance.

From the rest of your statement it sounds like you are concerned about ďwhat ifĒ this is completely legit but insurance isnít the answer. Instead spend some time getting prepared. Determine an evacuation location, have a bag ready to go. Have multiple weeks of water on hand. All of this will make you more prepared than insurance because as others have noted itís doubtful your home will be leveled and the 5 Star hotel down the streeet is still serving caviar.

NWedible did a great series on preparedness this fall, try reading that and investing some time in planning. I think youíll get more peace of mind than your $100/ month insurance. https://www.nwedible.com/preparedness-101-1-what-is-preparedness/

cchrissyy

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #8 on: February 08, 2018, 10:15:47 AM »
good points!

also, when you ponder "what if we have to live somewhere else" I'm sure you will find the answer is not $12k per month in a $400 hotel room. wouldn't you rent a house or apartment at a much lower monthly rate?  might you leave the area for a while? might you stay with friends or family?

another thing to check before you even consider getting the insurance "for the relocation expenses" is what is the policy limit on those expenses. it is probably limited to a small fraction of the home's replacement value. you need to know that figure in order to evaluate the numbers.

Cowardly Toaster

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #9 on: February 08, 2018, 10:17:27 AM »
Posting to follow. I just bought earthquake insurance here in the SF Bay Area. It cost me around $850 for the whole year via AAA. Part of me says I don't need it. But I feel like protecting my hard earned home. Not sure if I was thinking straight. I regret it sometimes, but the risk seems bigger.

What are you worried about? Foundation damage? Your whole house being knocked down? How old is your house? It just seems that modern houses handle earthquakes exceptionally well.

jamesbond007

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Re: Buying Earthquake insurance mainly for relocation expense?
« Reply #10 on: February 08, 2018, 10:23:25 AM »
Posting to follow. I just bought earthquake insurance here in the SF Bay Area. It cost me around $850 for the whole year via AAA. Part of me says I don't need it. But I feel like protecting my hard earned home. Not sure if I was thinking straight. I regret it sometimes, but the risk seems bigger.

What are you worried about? Foundation damage? Your whole house being knocked down? How old is your house? It just seems that modern houses handle earthquakes exceptionally well.

My house was built in 1971. It survived Loma Prieta in 1989 although it is about 30 miles south of the epicenter. I am worried about the unknown. I do have the money to rebuild my house. It's a small 945 sft townhouse. AAA estimates that the cost of rebuilding my house is about 120K.

to OP: Sorry to hijack your thread, but I feel you and I share the same concern and adding to this thread helps somebody in the future.