23 Jul California Storm Threatens $725 Billion Worth of Damage

Will your insurance cover the earthquake and flood damage that is predicted to happen?

On July 4, 2019, a 6.4 magnitude earthquake hit just north of Los Angeles, California. The next day, a 7.1 magnitude earthquake hit the area. Now, scientists are predicting a massive California storm that could cause a building toppling earthquake and the collapse of the Whittier Narrows Dam. If this prediction comes to fruition, 1.5 million people would need to evacuate and their homes would be under 20 feet of water.

Two major California earthquakes serve as wake up call

The recent California earthquakes damaged highways, ruptured gas lines, and caused house fires. Fifty houses were damaged that week. The back to back quakes as well as the threat of the “next big one” is forcing California residents to take a look at how to protect themselves.

The state of California is spending $16 million to install thousands of earthquake detection devices. While the detection will provide advanced warning of earthquakes to residents, giving them more time to evacuate, it does not protect the homes left behind.

How can California residents protect their homes from earthquakes and floods?

According to FEMA, California has the highest risk for earthquakes in the United States. How can residents keep their homes and families safe during an earthquake and/or flood?

1. Make a family plan

Before anything else, make a plan to keep the family safe during an emergency. Compile emergency food, flashlights (wind-up), bottled water, dust masks, goggles, emergency radio, and a first aid kit that is ready to go during an evacuation.

Next, put together an evacuation plan. Keep a sketch of a floor plan. Walk-through each room and determine two points of escape for each room. Choose a meeting location where family members should meet in case of an emergency. Make sure all members of the family understand the evacuation plan and where the emergency preparedness kit is located.

2. Keep the home safe

When you live in California, you need a home safety plan ready to minimize damage if an earthquake or flood occurs.

When homeowners are building out their home safety plan, they should create a checklist for earthquakes, floods, and other emergencies.

In the checklist, include:

• Fire extinguishers in all necessary location.
• Near the gas meter, keep a wrench and turn off gas before evacuating the property.
• Keep heavy and breakable items on lower shelves in cabinets with a latch.
• Keep wall decor away from beds or seating areas. Wall decor must be secured to the wall well, so it is less likely to fall.
• Strap appliances (refrigerator, furnace, water heater, etc) to the wall.
• Repair any issues with electricity or gas to ease the likelihood of a fire erupting.
• Install flexible piping for gas and water to avoid leaks.
• Repair structural defects like foundation cracks.
• Anchor all furniture to the wall.
• Add latches to cabinets.
• Ensure the structural integrity of the fireplace chimney.
• Trim trees with hazardous branches.

Be sure to prepare long before the emergency happens. As soon as you purchase your home, begin preparing your home for a disaster.

3.  Obtain adequate insurance

General homeowner’s insurance and commercial policies for rental properties excludes earthquake and flood coverage.  Both Earthquake and Flood policies need to be purchased as separate policies. Homeowner’s insurance policies and Commercial Policies for your rental properties will cover for fires as a result of an earthquake, but will not cover for damage to your home from an earthquake. These types of insurance are an add-on, but a necessary add-on in California and other states like Arkansas, Idaho, Illinois, Kentucky, Missouri, Montana, Nevada, Oregon, South Carolina, Tennessee, Utah, Washington, and Wyoming.

Earthquake insurance in California

The California Earthquake Authority (CEA) provides most earthquake insurance policies bought through your homeowner’s insurance company.

Interesting Facts:

• Earthquake insurance has the same limit as your homeowner’s insurance policy.
• The deductible does not need to be paid upfront. It can be deducted from the claim amount. For example, if you claim $1,000,000 in damage and have a 25% deductible, you will get a claim check of $750,000.
• Earthquake insurance does not cover landscaping or other exteriors like outbuildings and pools.
• Not every earthquake policy includes coverage for loss of income to your rental property should the property be uninhabitable due to an earthquake loss

Flood insurance in California

In the United States, flooding is the number one natural disaster. The U.S. Congress established the National Flood Insurance Program in 1968. The program is established through FEMA and covers flood protection for homeowners.

Interesting Facts:

• Flood insurance may be required in some areas.
• This type of insurance covers direct loss from a flood.
• Flood insurance excludes floods caused by earth movement, like earthquakes, so earthquake coverage must be added.

In Conclusion

To keep your family, home, and livelihood protected from a natural disaster in California and in some of the other states mentioned above, you need to be prepared.  Build out your emergency preparedness plan and kit, so when the next earthquake or flood hits, you’re ready to go.  It’s not a matter of “if”, it’s a matter of “when”!

Next, always be prepared for the worst.  Have your home maintained for an earthquake.  Ensure all electrical, gas, plumbing, and foundational issues are fixed.

Last, don’t wait until it’s too late, buy proper insurance and make sure if you do have coverage in place you are not passively renewing your policy.  Have a specialist review your policy at least once a year to ensure you avoid any surprises after its too late.  In California and many other states, earthquake and flood insurance are a must especially now as we are seeing a drastic rise in natural disasters and experts project this will continue.  Protect your rental properties and assets by contacting your insurance broker and ask about on earthquake and flood insurance coverage.

Call your apartment insurance experts today at 650-282-3104 *1 or email us at hello@gsisol.com.

GSI is a full service insurance and risk management brokerage that specializes in the Apartment and Property Management Industry.   Visit us at:  www.gsisol.com