Take a chance on quake insurance?

A cost-benefit analysis

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Q: I was recently offered earthquake insurance from my carrier. My thoughts are that it would make more sense to retrofit the house, as you mentioned in a recent article, rather than pay a monthly premium for insurance. What are your thoughts on this? I live about 45 minutes north of San Francisco. A: The answer of whether to buy earthquake insurance lies in a cost-benefit analysis and your tolerance for risk. A rider covering earthquake damage on a homeowner's insurance policy can double the cost of the coverage and typically comes with a whopping 15 percent deductible. Considering there have been two major quakes in the San Francisco Bay Area in the 20th century causing significant damage (San Francisco in 1906 and Loma Prieta in 1989), one might conclude the cost is not worth it. We've owned residential real estate in the Bay Area since the early 1970s. Although our carriers offered us earthquake insurance, we never bought it. We weighed the cost against the risk and...