Major Earthquake? Insurance Alone Won’t Protect You

BY ALI SAHABI

Nobody should be caught without insurance. It’s an essential tool to guard against excessive risk associated with our automobiles, our property, our health, even our lives.

But while insurance may help to cushion the blow of an accident or worse, it does nothing to prevent these adversities from occurring.

If you own a building at risk of damage in an earthquake, you have four basic options to consider: 1. The “Do-Nothing” Approach 2. Purchase Insurance and Don’t Get a Retrofit 3. Invest in a Retrofit and Don’t Get

Insurance 4. Retrofit Your Property and Get

Insurance at a Discount Do Nothing: Few people would seriously argue the do-nothing approach — is the best to follow. Seismologists warn that a major quake — one with the force to rip along the San Andreas fault and displace it by an average of nine feet — is long overdue. This looming 7.8-magnitude earthquake in Southern California would result in more deaths and nearly twice the damage as the 1994 Northridge earthquake to our buildings, including infrastructure such as critical transportation, power and water systems. Insurance Only: Purchasing insurance without a retrofit, is better than doing nothing. Depending on the level of coverage you buy, it can cover all or part of the damage to your building, its contents, and perhaps income lost if your building becomes uninhabitable.

When considering this option, it’s important to factor in the cost of deductibles, which can be as much as 15 percent of the value of a building. For a million-dollar structure, that would require $150,000 out-of-pocket before you could even start to collect on your policy. In these instances, a retrofit may be much more affordable. Retrofit Only: Investing in just a retrofit and not getting insurance represents a tangible step toward preventing damage or injury in a major earthquake. Retrofits are proven to help dramatically reduce the risk of building failure during an earthquake.

Many insurance carriers recognize this and will require retrofits of vulnerable buildings before providing earthquake coverage for them. Financial institutions are increasingly not lending on buildings that are not retrofitted. Retrofit and Insurance: Getting a retrofit and earthquake insurance, is the best way to protect a property owner.

This is by far the safest option. A retrofit helps to secure the building and minimize damage and loss. Insurance helps to keep building owners covered in the event of any damage, and the coverage can include loss of contents, liability and more.

About the Author: Ali Sahabi, a licensed General Engineering Contractor (GEC), is an expert in seismic resilience and sustainability. He is Chief Operating Officer of Optimum Seismic, Inc. The Optimum Seismic team has completed more than 3,500 seismic retrofitting and adaptive reuse projects for multifamily residential, commercial, and industrial buildings throughout California.

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modifications due to revenue shortfall.

To summarize, economic growth plans must include attracting new businesses along with attracting new residents. This can all be easily accomplished with smart and thoughtful zoning coupled with the political will of local elected officials to approve well planned projects.

About the Author: Mike Posey is presently serving his second term as a member of the Huntington Beach City Council. He was elected in 2014, after serving on the Planning Commission, and was re-elected in 2018. He has represented Orange County as a member of the Southern California Association of Government’s Regional Council and its Community, Economic and Human Development Policy Committee. Posey also serves as Chair of the Association of California Cities Orange County’s Housing Committee. Additionally, he frequently participates on housing issue speaker’s panels and is scheduled as a guest lecturer at Cal State Fullerton to address housing.