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Californians Express Renewed Interest in Earthquake Insurance

People in California are suddenly expressing interest in earthquake insurance in the wake of the 9.0-magnitude quake that struck off the coast of Japan two...
April 7, 2011

People in California are suddenly expressing interest in earthquake insurance in the wake of the 9.0-magnitude quake that struck off the coast of Japan two weeks ago. Phones at the California Earthquake Authority have been "ringing off the hook" according to Chief Executive Officer Glenn Pomeroy, who says the nonprofit, state-run authority should have a better idea next week whether those inquiries will result in additional sales.

Following the 7.0-magnitude earthquake that struck Haiti in January 2010 and the 8.8-magnitude quake that struck Chile just over a month later, the CEA issued nearly 5,500 new policies in March 2010, which was, at that time, the largest growth of new policy sales in the 14-year history of the CEA. After a 7.2-magnitude temblor struck near Baja, California, and Mexico a month later, the CEA issued nearly 7,000 new policies.

In California, only 12 percent of residents who have a fire policy also purchase earthquake coverage, according to information from the state insurance department. That mirrors a 12 percent take-up rate in Japan outside of Tokyo. The take-up percentage in California for businesses is lower, at 9.5 percent.

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