A Reflection on Preparedness and Resilience
January 17, 2024, marks the thirtieth anniversary of one of the most notable natural disasters in the United States. On this day in 1994, the Northridge earthquake, a magnitude 6.7 tremor, struck the San Fernando Valley region of Los Angeles. The quake caused widespread destruction, claimed lives, and left a lasting impact on how we understand and prepare for earthquakes. Thirty years later, the lessons learned from this catastrophic event continue to shape earthquake preparedness and response strategies not only in California but around the world.
Changing the Path of Earthquake Insurance
In the earthquake’s aftermath, many insurance companies either stopped offering earthquake insurance or severely limited their offerings in California. This was because insurers reassessed the risk and potential costs associated with major earthquakes, and many found it too risky or unprofitable to continue offering coverage under the existing terms.
Following the insurance turmoil caused by the Northridge earthquake, the California Earthquake Authority (CEA) was formed in 1996. This entity, which is managed by the public sector but funded privately, offers earthquake insurance to homeowners in California through a group of carrier partners. The establishment of the CEA aimed to guarantee the continuous provision of earthquake insurance within the state and to bring stability to the fluctuating insurance market.
Meanwhile, privately held GeoVera was granted an admitted Certificate of Authority from the California Department of Insurance as GeoVera Insurance Company and quickly captured a significant slice of the residential earthquake insurance market in California. Today, GeoVera remains “A” rated (Excellent) by A.M. Best Company and is recognized as the premier stand-alone provider of earthquake insurance.
Earthquake insurance offers coverage tailored to protect your property and belongings damaged as a result of an earthquake, providing peace of mind and financial security during uncertain times. Having a separate Earthquake policy is important because a standard Homeowners policy does not cover damage from earthquakes.
Keys to Claims
Preparation is key to responding to a catastrophe. While nothing like the devastation of Northridge has happened to our region lately, GeoVera is prepared. As a catastrophic company, GeoVera doesn’t just cover Earthquakes. In fact, GeoVera has responded to every recent storm hitting the Gulf Coast. That means we know how to react quickly, assess in a timely matter, and get help to those most in need with minimal delays.
As Chris Sanders, Vice President of Claims at GeoVera, explains, “Rebuilding after the next event will be a lengthy process, so make sure that you have plenty of additional living expense [Loss of Use] coverage to take care of you and your family while repairs are being made. Keep your information handy i.e., your policy number, where to call, etc.… so you can get in touch with GeoVera, and we can start helping you as soon as possible.”
If filing a claim, here are some of the key details you will need to share and have resolved with the insurance adjuster assigned to you:
- Extent of the damage to your property.
- When did you first notice the damage?
- Was there an earthquake in the area?
- Do you know the location of the earthquake/where it was centered?
- Policy coverages and limits.
- Coverage exceptions within the policy
- Deductible(s) within the policy
As far as the deductible goes, Earthquake insurance pays the insured for the claim amount minus the amount of the deductible. Deductibles can range from 2.5% to 25% of the insured property value. Selecting an appropriate deductible hinges on your financial position and risk tolerance.
Importance of Building Codes
Another one of the key takeaways from the Northridge earthquake was the crucial role of building codes in minimizing earthquake damage. Many commercial and habitational buildings that were not up to code suffered significant damage or collapse. In contrast, structures built or retrofitted to withstand seismic activity fared much better. This highlighted the need for stringent building codes and regular updates based on the latest seismic research.
Emergency Preparedness and Public Awareness
The earthquake underscored the importance of public awareness and preparedness. Many residents were caught off guard, lacking basic emergency supplies or knowledge of what to do during and after the quake. Since then, there has been a concerted effort to educate the public on earthquake preparedness, including how to secure heavy furniture, create emergency kits, and develop family evacuation plans.
The Northridge earthquake was a wake-up call, reminding us of the ever-present and unpredictable threat of natural disasters. It taught valuable lessons in preparedness, building resilience, community response, and the importance of the right insurance.
