Should you have earthquake insurance?

It has been 14 years since the devastating Northridge earthquake. We've learned a great deal about earthquake readiness since then. However, a lot of people still don't have earthquake insurance.

The Northridge earthquake in 1994 proved a shaking planet can do a lot of damage. At that time, the Earthquake Authority was formed, which is run by the state and private insurance companies. The Authority is one source that offers earthquake insurance to those who feel they need it.

"It's an investment in the house," said Roger Borelli, who has earthquake insurance. "You got to have something just in case."

"What happens if you don't have a house? Nobody pays. The government doesn't help?" said Mia Simin, a Southern California resident.

Earthquake insurance is not required. The Insurance Information Network says only 12 percent of California homeowners have it. Cost is one of the big reasons many don't go for the coverage.

"The premiums seem like they're really, really expensive. And then, the amount that I have to pay up front, it didn't seem to cover enough," said Jane Lee, who does not have earthquake insurance.

"Is it affordable? It depends on what you budget for. You could be paying anywhere from $500 a year to $2,000 a year," said Candysse Miller, Insurance Information Network. "It depends on your circumstances. Are you on top of a fault? What is the chance of liquefaction in your neighborhood?"

"The premium isn't that high. It's the deductible that's very high," said John Beckman, a Southern California resident.

The deductible can be 10 or 15 percent of your claim depending on the policy.

For example, if your home suffers $500,000 in damages, a 10 percent deductible would amount to $50,000. A 15 percent deductible policy, although less expensive, amounts to a $75,000 deductible.

"Hopefully, I'll never have to use it," said Borelli.

The deductible is not an out-of-pocket expense. It is actually subtracted from your claim. So, if you have a $200,000 claim and a $50,000deductible, you will get only $150,000 from your insurance company. The rest can be made up with FEMA and other government loans.

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