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Shrinking number of Calif. homeowners insured against earthquakes

Posted by The Aramco Group on Sat, Jul 15, 2017 @ 14:07 PM

The big one is coming. That's the old adage that Californians are familiar with. But over the past few years the U.S. Geological Survey has mentioned repeatedly that the chances of a magnitude 8.0 or greater earthquake hitting is increasing.

Although the threat of a massive earthquake is looming over the Golden State, many homeowners are still opting out of earthquake insurance coverage because of concerns over high premiums. The California Earthquake Authority states that when the 1994 Northridge quake struck, 30 percent of homes were covered. Today, they say it's half that.

As a result, the CEA is working to change the perception many have regarding earthquake coverage. Their website features a calculator that allows homeowners to enter the location of their home and it's value to generate an estimate. Costs vary depending on the age of the home and it's proximity to a fault but industry insiders say Californians may be surprised by how inexpensive some policies can be.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4 percent while 15-year rates are near 3.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.