Despite risk, few homeowners have earthquake insurance

But despite the fact that California, and the Western U.S. In general, has been a historical hotbed for tremors, the number of residents with earthquake insurance has been shrinking. The Insurance Information Institute, a nonprofit backed by the insurance industry, put out a survey on Monday showing that the percentage of homeowners in Western states with earthquake insurance was at 10% in May, down from 22% a year earlier. And, the California Earthquake Authority, which provides earthquake insurance, says only 12% of Californians have a policy. Overall, 7% of U.S. Homeowners have earthquake insurance, down from 10% last year.

The Insurance Information Institute’s report also notes that 8 out of 10 of the costliest U.S. Earthquakes over more than a century (based on insured and uninsured damages) have occurred in the state, with the other two happening in Alaska and Washington. What’s more, the report notes that the U.S. Geological Survey has said there is a 70% probability that an earthquake of at least magnitude-6.7 will hit the San Francisco Bay area in the next three decades. The USGS has also said Southern California could be at even greater risk for a major earthquake than the northern part of the state over the next 30 years.

Despite the risks, earthquake insurance, which is separate from home insurance policies that cover other natural disasters like tornadoes and wildfires, seems to have fallen out of favor due to its high cost. Earthquake insurance policies also tend to have a deductible between 10% and 15%, making them even less attractive.

Of course, the shock value of this most recent earthquake could very well inspire some renewed interest in earthquake insurance, as The Wall Street Journal reports that the California Earthquake Authority’s website had five-times its normal traffic at more than 17,400 visits on Sunday following the earthquake.