Hi John,

Unfortunately, people can't wait until a quake strikes in their neighborhood to determine its a good time to buy quake insurance. However, thanks to seismologists they've already told us in long term probability studies we are due. You know, the one that says within 30 years there's a 70% chance of an earthquake arriving. The last time the Bay Area received those was in 1990 following the 1989 Loma Prieta quake. Come October we'll be 14 years into it. Thus as each day approaches we are a day closer. Plus, they do wish to convey that they mean "within 30 years", not that it will be 30 years.

You do know where the 30 year figure came from don't you? For the sake of our readers let me elaborate. The 30 year probability time frame comes from the length of an average persons mortgage. It is not based on fact. Given that quakes cannot be predicted as I said before, we are hanging out there in earthquake country with no idea when the next quake will occur, so the best thing we can do is be prepared, which includes being financially prepared as well.

Now as to insurance companies making a profit, here's a little factoid. State Farm paid out all of the money they ever collected over the years in quake insurance and paid it out in Northridge. Their Fire company had to borrow money from their auto division to shore up their reserves. They lost and so did many others. That's why we have the CEA today. One of the clauses in the CEA policy says that if they run out of money, every policyholder will be assessed their share of the losses. While it may seem unlikely this could occur, we won't know until a major earthquake in a large metropolitan area occurs and then we will see how far those dollars go.

As for hiring seismologists, they do, and they use their skills in mapping high seismic risk area's. They use those mappings for fire insurance, not quake insurance because if they sell a fire insurance policy to a person who lives in a high seismic risk zone, their house could be totalled by fire and under the fire insurance policy they will pay, even if it was a result of an earthquake. Thus they will decline to write fire insurance for those most at risk. They also map for flood and brush exposures as well. So it is a 3 part mappping, not exclusive to seismic risks.

In Gilroy's last 5.0 in 2001 the water heater in a house came off of its little stand because it wasn't seismically braced. The entire house was lost by fire. It should not have ever happened. For $13.00 for the kit and $50 to install, the house would have been fine. Thus we have to ask, was the homeowner totally unaware that this could occur? Was the person lazy? Too frugal? Most likely just didn't know.

Petra