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In Heart of Earthquake Country, Most Homeowners Go Without Quake Insurance

SAN FRANCISCO (KPIX) -- Aside from the physical dangers of earthquakes, they can also take a huge financial toll. So why are so few people willing to protect themselves from that?

"If there was ever a place where the threat of a major earthquake should feel real, it's here in the Bay Area. It happened to San Francisco in 1906 and then again 83 years later with the Loma Prieta quake. Each time people cleaned up the mess and rebuilt.

But when it comes to paying for that rebuilding: "You are completely on your own to pay the cost of repair. Everything, absolutely everything," said Sara Sol, a spokesperson for the California Earthquake Authority.

Earthquake damage is not included in most homeowner insurance policies so the state created the California Earthquake Authority to offer coverage for those who want it. As it turns out not many do.

In a state with more than 39 million people, the Earthquake Authority only has slightly more than a million policy holders.

"Because it doesn't happen that often it's not like car accidents, right?" said San Francisco resident Terry Milne.

People will insure cars even if they've never had an accident and buy fire insurance without ever having a fire but earthquake insurance is perceived by many to be a waste of money.

While you might think small reminders like this week's earthquake in Pleasant Hill would be a motivator, Danville resident Zack Naqvi says the opposite is true.

"It basically further instills that belief 'Oh, this earthquake happened and nothing happened so I don't need to worry about it.' It's kind of that perception, it strengthens as these smaller ones keep happening," Naqvi said.

One turn-off for homeowners is the cost. According to the agency's website, a modest policy for a two-story home in Concord would cost more than $3,100 per year. But the Earthquake Authority says that's because their prices are based on someone's individual risk.

"Earthquakes may not cause the kind of damage you see in a Hollywood movie. They're not going to necessarily kill you but they may very well bankrupt you. They're going to take a pretty good hit on your finances."

Quake insurance can be very beneficial to those who rent in the Bay Area. Since the policy isn't covering the structure -- just people's personal possessions -- it may only cost a couple hundred dollars for, say, $50,000 worth of coverage. But James Chionsini prefers to take his chances with an optimistic view that is uniquely San Francisco:

"If the big one comes, hey, bring it on, because the way I look at it ... it's like the longer the earthquake, the lower the rents are going to be!"

If you want to see what earthquake coverage may cost you, there's a calculator on the California Earthquake Authority website.

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