From: kettering@addvax.llnl.gov (Brett 'Volleyball Is My Game' Kettering)
Newsgroups: misc.consumers.house
Subject: Answers about California Required Earthquake Insurance
Date: 19 Aug 92 17:28:00 GMT
Organization: Lawrence Livermore National Laboratory
News-Software: VAX/VMS VNEWS 1.40

From : Message-ID: <l92s0mINNf8a@exodus.Eng.Sun.COM>

>It's that time of the year again, to renew my homeowner's insurance.
>There's this new wrinkle that the State of California has thrown in,
>in it's infinite wisdom:  CA provides mandatory quake insurance of
>upto $15K, with a variable deductible, for about $60 in premium.

The premium amount varies according to where you live.  I live in Tracy and
it is $16 there.  In Livermore, just over the hill, it's $61.  Go figure.

>I already have 100K of quake insurance with a 5% deductible, with
>State Farm (have to check if I have the code upgrade rider!).

The $15K figure is for structural loss only.  There's a $1K amount for housing
expenses while you rebuild.  There's a $2K amount for meeting local building
codes when you rebuild.  There are low-interest loans available through the
program also.

>Can anyone answer these questions!

I'll try.

>1) Can I use the $15K of CA's coverage to pay State Farm's deductible?

Yes.  There is a deductible on the $15K amount also, though.  This deductible
is 0.5% of the value of the structure, at least $1K and not more than $3.5K.
So the most you're going to get is $14K.

>2) Who pays what first?  State Farm says that these are 2 separate
>   policies, and that one doesn't affect the other. Huh?

The policies are independent, so both are obligated to pay.  It's like having
2 life insurance policies.  When you die your beneficiaries get both, not one
or the other.

>3) If I have a 15K loss, how do I split the claims?

You don't split the claims.  You collect as much as you are eligble to collect
from the state.  You also collect as much as you are eligble for from your
insurance company.  Your insurance company does not carry this policy, they
are only collecting it for the state.

>4) Can I ignore CA's insurance (I don't want IOUs :-)

At this point you can.  The only penalty for not paying is to not be covered.
Nevertheless, our blundering leaders in Sacramento just met to discuss this
law.  They considered repealing it, which they did not.  They also will
consider levying a fine against those that do not pay, which I bet they will.
You can contact your agent and refuse to pay it.  Like I said, at this point
your only penalty is lack of coverage.

>5) The SF agent suggested raising my SF policy to $150K with a 10%
>  deductible, so that the $15K deductible would be covered by CA.  Seems
>   a bit much to me.

Of course, bigger policy, bigger commission (sp?) for him.  If you're going
to carry Earthquake coverage, I would only have it for as much as the value
of the structure, which should be shown on your statement.  Afterall your
fire coverage is based on that.  This includes your possessions inside also.
Then I would raise the deductible up to the level that you expect to be
covered by the state.

-------------------------------------------------------------------------------
Brett M. Kettering
PaperNet: LLNL P.O. Box 808 L-437 Livermore, CA.  94551
InterNet: brettk@llnl.gov
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"No other success can compensate for failure in the home."
                   -- David O. McKay
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