Earthquake insurance can be a costly expense that some homeowners opt out of due to high prices. The perception that damage is unlikely even in earthquake-prone areas of the country makes it hard to justify spending sometimes as much as a homeowners' policy on additional earthquake protection. The Orange County Register reports that in Long Beach, Calif., many residents pay between $500 and $700 in premiums for standard homeowners' insurance, and are sometimes asked to pay another $500 for earthquake policies.
The cost of protection from the unpredictable natural disaster could become more affordable, however, with the California Earthquake Authority proposing an 8 percent decrease in rates. Local insurance agents welcome the proposal, as it may make it easier to close traditionally difficult policy sales. The Los Angeles Times reports that only 17 percent of California residents are insured against earthquake damage, priming millions of homeowners for considerable losses in an emergency.
"Californians have a well-deserved reputation for being in denial," writes Liz Pulliam Weston for the newspaper. "We build our homes on flood plains, on brushy mountainsides, in the path of mudslides and on or near earthquake faults. Most of the time, most of us avoid catastrophe. But we should acknowledge that someday our luck could run out — and consider whether it's worth taking precautions to protect against the unthinkable."
While policies vary by area, high risk regions can cause rates to be priced out of reasonable affordability on the part of homeowners. However, recent seismic events on the West Coast have caused agencies, companies and customers to reconsider the coverage, which can save homes and livelihoods if an earthquake hits. Like many insurance policies, it can be difficult to see the benefit of spending on a premium until after it's too late.