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Insured for The Shakedown?

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It's funny— we doubt many people paid attention to the article about earthquake insurance in Sunday, Oct. 21's Chronicle. Now, just over a week later, earthquakes and concerns related to such are suddenly on everybody's mind, and the piece seems oddly prescient. The money quote: "Earthquake insurance is extraordinarily expensive - it typically doubles a homeowner's annual premiums." We're sure the formulas that insurance companies use to arrive at these costs make sense, more or less. But still— in a market that's hardly affordable, doubling your insurance bill sure feels like a scam. Particularly when you factor in the huge deductibles— of the 40k+ homes damaged in Loma Prieta, only 25% met the deductible.

Of course, if you believe the big one is nigh, you may feel you can't afford not to have it. Not many feel this way, we suppose: the fact is only about 12% of Californians have earthquake insurance. A wrinkle? Against the backdrop of all those interest-only loan loans in recent years, we're guessing that a large amount of recent homeowners do not, in fact, have earthquake insurance. Since they got these loans to minimize monthly payments, and likely have little equity, why would they? In any case, would any of you rethink your stance on earthquake insurance in light of yesterday's little rumbler?
· Earthquake insurance in the Bay Area is expensive, risky business [Chronicle]

[Image from the Red Cross's earthquake drill in Union Square, August 2001, courtesy Scott Beale/ Laughing Squid]