Claudia Buck

Claudia Buck: Covered for a quake? Napa's temblor has homeowners wondering if they need insurance

When Virgil Chapman was jolted awake by Napa’s earthquake early last Sunday morning, he knew it was bad. Trapped in the “pitch-black” darkness, he couldn’t move beneath the weight of a bookcase, a TV and a heavy dresser that had collapsed, pinning him in bed.

“It took me half an hour to get unburied in my bedroom,” said Chapman, a retired RN, who lives half a mile from Napa’s downtown.

Luckily, Chapman and his wife weren’t hurt. Since then, they’ve been sweeping up debris and assessing their losses, which include broken mirrors and lamps, cracks in their kitchen walls, a ruined TV and a half-destroyed chimney that tumbled bricks into their side yard.

The worst part? Chapman’s earthquake policy may not cover any of his losses.

“It’s a big joke. I’ve been paying expensive premiums for years, and now I’m finding out it was no good,” the 69-year-old retiree said.

It wasn’t until a call to his claims adjuster, Chapman said, that he learned his policy carries a $50,000 deductible. Having survived several quakes that caused damage in his 1950s-era neighborhood in the last three decades, Chapman figures the cost of his home’s repairs and replacements will “probably run into the thousands of dollars” but won’t reach his deductible amount, meaning he’ll have to pay out of pocket.

As Napa Valley residents and business owners clean up and tally damages from last Sunday’s 6.0 earthquake, many are coming to grips with their earthquake insurance coverage – or lack thereof.

In California, earthquake policies for homeowners typically have high deductibles and good-sized premiums. According to the state Department of Insurance, the average statewide premium is $800, but it varies widely depending on a home’s age, geographic location, type of foundation, construction and other factors. Chapman’s premiums for his 11/2-story house in earthquake-prone Napa ran about $900 to $1,000 a year, he said.

Generally, the deductible for earthquake policies is 10 percent to 15 percent of the home’s assessed value. If a home is valued at $225,000, for instance, the deductible could be as much as $33,750.

Only 10 percent of California homeowners and businesses that bought property insurance policies in 2013 had earthquake insurance, according to the state Department of Insurance.

But insurance experts say homeowners shouldn’t assume the worst about their coverage, especially after a disaster.

“They should always ask for a claims adjuster to come out and check the foundation and things that aren’t visible,” said Lynne McChristian, disaster response coordinator for the New York-based Insurance Information Institute. “There may be some structural issues that a homeowner isn’t trained to recognize, but a claims adjuster is.” Those unseen damages could up the amount of repairs and go toward that deductible amount.

McChristian, who was in Napa on Monday meeting with insurance officials and homeowners, said calling a claims adjuster to evaluate your home after a disaster is essential. “It’s what you pay those premiums for,” she said.

Like all insurance, the higher the deductible, the lower the premium, but it means the homeowner shares in the cost of the claim.

But the deductible doesn’t apply in every situation. D’Anne Ousley, spokeswoman for the state Department of Insurance, said homeowners with earthquake coverage are entitled to $1,500 for emergency repairs and “loss of use” when they’re unable to stay in their home because it’s uninhabitable. She said there is no deductible applied in those cases.

And even for those without earthquake coverage, if a fire erupts because of the earthquake, their regular homeowner’s policy can pay for damages.

Earthquakes like last week’s are “a teachable moment,” said Nicole Ganley, spokeswoman for the Association of California Insurance Companies, “because there are things you can do to mitigate damage to your home.” Among them: strapping the water heater, securing your foundation, and bolting bookcases and large-screen TVs to the wall.

Do a home inventory, walking room-by-room to describe furniture, electronics, closets and drawers. Take a video or photos. Do the same outside in your yard and garage. Having a complete home inventory can make filing a claim considerably easier in the event of disaster.

Homeowners with any kind of insurance also should keep their insurance agent aware of any home improvements, such as upgraded granite or tile or added square footage. If those details aren’t included in your insurance policy coverage, you may be underinsured.

“Have an annual conversation with your insurance agent to make sure you’re covered and that your policy is keeping up with your needs,” said McChristian of the insurance institute. “It’s time well spent and doesn’t cost you a nickel.”

And, she urged homeowners to remember: Buying insurance is protection against devastating losses. “It may not seem worth it for minor damage, but it is designed for catastrophic loss, in case your house is a total loss.”

The Napa quake could have been much worse and should be viewed as a “wake-up call,” McChristian said. “People always say after an event, ‘I didn’t know.’”