Hi Mary Jane and Lowell,

An issue at hand today is the calculation of what it costs to repair part of a home, rather than reconstructing a new one. As losses are adjusted they are finding time and again that the costs are far greater than they originally thought. What it means is that we need to buy more coverage, because policies are failing to cover the losses. They do pay as they provide some type of replacement cost coverage, but the margin is very close.

Reconstruction after an earthquake is often found to be more costly than after a usual type of loss, such as a fire. Getting materials to work with and enough contractors to go around to do the work itself is expensive. Often these people come from other states to assist, but the costs per hour they need to do the work is higher because they have to live away from home.

But the greatest assessment in earthquake actuarial computations comes from the advise of seismologists who calculate the risk and structural engineers who determine buidings and structures at risk. What we share in rate hikes in your area and the west coast are the same. Every day we move closer to the next seismic risk and the costs of labor and supplies is constantly going up. This is an area few know about because we don't have out homes reconstructed because most of us don't suffer losses. It works the same at auto body shops, you get sticker shock when you see the estimates for repair when you've been away from seeing those costs.

Something I think all of us can understand is how the cost of fuel affects almost everything. Those trucks that travel long or short distances need gasoline and at around $2.00 per gallon, the item they are delivering has to be sold at a higher cost to compensate for this expense.

One of our greatest expenditures at home is the cost of groceries, but they seem to go up a nickel or dime at a time, but when you take a full shopping basket to the checkout counter, five or ten cents on most of the items you have in your basket suddenly becomes $15 or more extra dollars than a few months ago. I find it rather sneaks up on us.

Mary Jane, I'm glad you have made a wise decision in purchasing earthquake insurance. I am an insurance agent and also one who knows the risks involved. To lose the greatest investment in your life for any reason is a true personal disaster.

Petra