The reason the quake insurance premiums and deductibles are high is because you are probably in an earthquake area.  How much do you want to risk on a major asset? I suggest you have a serious conversation with your insurance broker and/or financial advisor.

 ... can you absorb a 650,000 loss... and not be very concerned or impacted by it?...  I think that is the bottom line in most cases.  Personally, I would either move or get insurance.

Jess stullman I just pulled this off of the Internet:

I think I would talk to an insurance agent that you trust.  Good luck.

This is a great question for your homeowner insurance company/agent Jess stullman 

I have no idea! We don't have earthquakes in our neck of the woods!

$650000 value with the land value being $300000?  The answer is in the numbers.

I predict we are due for a big earthquake when I don't know.

My sister owns a house in Santa Cruz that is single story. When the Loma Prieta earthquake hit her chimney she had the 1989 equivalent to a CA policy which had a 15% deductible on a house with the replacement cost of $400000 - total value about a million ( as in most California coastal the value is mostly land but earthquake insurance doesn't cover that. Her deductible ended up being $60000.00. the fireplace, chimney, and flue had to be replaced, roof repairs as well - total cost of repairs $19800. They stayed with family for a week or so when the messy dusty work was being done but if they had to stay in a hotel a month that might have cost another $4000 - She paid for the insurance of $9500 a year policy BUT was paid zero on the claim as she didn't meet the deductible. Cost of the policy wasn't worthwhile.

63 people died in the Loma Preita earthquake, a few people in her area died, had total cave-ins but most only the chimney was damaged. Today most houses that were repaired after the 1989 earthquake chose to remove the fireplace and have no chimney today, avoiding a brick and mortar crumble down.

I had a client also with earthquake coverage in Northridge who after the 1994 quake there suffered about $9100 in damages, also well below the threshold for getting any help on a claim.

57 people died in the Northridge quake

If there is a FEDERAL emergency declared. FEMA has given out maximum $32000 to homeowners who had 90% loss or more. However, they did not, do not pay all claims, you must demonstrate need (be poor) FEMA rejected 1.3 BILLION dollars in claims in the 1994 Northridge quake. I would not count on FEMA to help much

You own your house free and clear and have a HUGE cash cow that cannot run from an earthquake. How close are you to the  Alquist Priolo fault zone? Pinole Valley High School and the Crispy Creme are built on the fault and would be on soil that liquidates.

 Alquist-Priolo fault zone

The best way to decide is:

How much brick, mortar, fireplace, granite, slab do you have to replace?

Come up with a cost:

Get two quotes for the insurance and read the fine print on deductible.

Assume there is an 8 point quake in San Francisco and your house falls down. Do you have the cash resources to rebuild?  Where will you live in the temporary chaos that occurs?

How much peace of mind do you need to relax?

I might suggest you have a mortgage - the bank doesn't rebuild but if you chose no insurance and there was a big one you might have more options...

Hard to answer the question without knowing how much money you have, age, construction type of house. If house is 2 story with lots of brick -get the insurance its the only choice

I know neither you nor I could afford a $650K loss so I would get the insurance but I would take a lower priced plan with a higher deductible. That way you may be on the hook for some money but it won't be $650K. 

If your house is in an earthquake area and you do not have insurance, then you are self insured to that natural disaster.  Only you know if you have the resources to recoup from such an incident.  Premiums may be high, deductibles may be high but no insurance and your house is a total loss?

As a fellow Californian, I have EQ insurance on all four of my homes.  The deductible is not horrible and is considerably less than the price of rebuilding the home.

Well, living here in CA, I'd definitely get an earthquake insurance with or without financing request..... Too risky not to.

better to have it and not need it than to need it and not have it.

It's better to have at least some piece of mind (insurance) even if its not total protection in the rare event of an earthquake damaging your home.

Jess stullman - good answer from Steve Penner.

I used to live in CA and once was about to purchase a home in Hercules.  I would get the earthquake insurance.  Or sell your home and move to Dallas where you can get a nice home half the cost of your Hercules home! 

   Sounds like insurance for a  Florida home that was built beyond the Coastal Construction Control Line (CCCL).  

If I lived there, I'd have it for sure..... I wouldn't want to absorb that loss!!!

Jess stullman 

I live between two faults south of you in Santa Clara County. During Loma Prieta  7.8 I  bought a 10% deductible Earth Quake coverage and realized no matter what your damage will always be under that.   If you home is not built by adode clay and has solid foundation you will never be able to use it.  As a realtor I am not aware any clients even bother to buy Earth Quake insurance as it is considered not practical.  

Hope that helps.

Sam

I can't provide advice but I bet your insurance agent can. Or a financial advisor.

Jess,

Talk to your financial adviser.  A

Discuss this with your trusted insurance agent.

Thank you Nina for your response -

Great answers are here.

Thank you.

Thank you. Good answers are here. 

If there was a chance of losing your $650,000 investment, I would.

Best bet, Sell the house and take the money and retire to Wisconsin where you can buy a comparable home for $100k and enjoy the excess money.

This will be a personal choice for you.  We have similar issues with Hurricane Insurance here in FL.  I have elected to buy it (for now).

Move or insure unless you are a gambler who can afford to lose $650,000 with one shake of the dice!

We both live in an earthquake belt and I know many of my clients have dropped the earthquake insurance because of that deductible being so high.

Insurance is for protection and is not cheap but neither is losing a $650,000 investment if the earth starts to rumble.

Understandable that this would come up.  If in a potential zone, it wears on you. If not, who cares? Que Sera Sera To spend that type of money for years in the event of something happening is money thrown away until you need it. When is that? If one has money fine. If not, find your peace

How would you feel or what would you do if the house got destroyed tomorrow

This should be a discussion with your family, your accountant and your insurance carrier. 

That is a good question for your insurance company.

My question would be do you have the wherewithal to self-insure? If yes, then fogetaboutit. If no, you should get some.

I would not put myself in a position of not having earthquake insurance. Who can afford a catastrophic loss if the house were to crumble like a house of cards?  I'd be shopping around and find the best price for the most coverage.