Even though you might not feel them, San Francisco has minuscule earthquakes every single day, and on average the city experiences at least one a year that will definitely make you take notice. On August 24th, an earthquake struck Napa, California, just an hour’s drive away from San Francisco. The resulting damage could exceed $500 million according to Risk Management Solutions, one of the leading risk management software providers to insurers across California. But this only takes into account claim damages submitted for insured properties. CoreLogic EQECAT estimate uninsured damage reaching up to $2 billion.
During our time as one of the leading property management companies in San Francisco, we’ve seen this situation play out nearly every year. Yes, this specific event was very localized, and most of the damage occurred in unreinforced brick structures in downtown Napa; however, for the people on the hook for $2 billion worth of damages, this relatively small 6.0 earthquake is certainly not something to shrug off.
Our property management in San Francisco focuses on helping people make financially sound yet worthwhile investments. But without earthquake insurance, you’re taking a gamble far more risky than buying a new piece of land or building. Despite how prone San Francisco is to earthquakes, most residential policies don’t cover the damage, leaving owners without a separate earthquake policy liable for all repairs to their properties and replacement of any personal items damaged in the quake.
Purchasing an earthquake insurance policy prevents all of this. While even the yearly moderate earthquakes San Francisco and the surrounding Bay Area experience often do little more than knock pictures off of shelves and crumble already dilapidated structures, it just takes one to destroy your investment and put you in financial ruin. When looking for a policy, it’s important to determine what level of coverage you need, factoring in the cost of replacing the household or business possessions kept on the property, pay for temporary accommodations in the event your property becomes unusable, and make any repairs, or possibly replace, the structure on your property.
When you have significant funds saved, lines of credit available or built-in equity you can afford to lose, you can often choose an earthquake insurance policy that covers less than the overall investment you have in San Francisco; however, during our time handling residential and commercial property management in San Francisco, we’ve learned that paying a slightly higher premium every month or year is worth the peace of mind and security.
