While the state of California offers earthquake insurance to residents, many homeowners choose not to buy policies – opting instead to rely on government aid if an earthquake strikes. If you are trying to decide which option is best for you, consider the following:
- If a quake is declared a disaster, the government will provide low interest loans for home repairs through the Small Business Administration. BUT, the loans only go up to $200,000 and you have to qualify to get one. You also have to pay it back, and even 3% interest adds up over thirty years.
- FEMA (Federal Emergency Management Agency) can provide some emergency funds for low income families who don’t qualify for SBA loans. The maximum FEMA payment is $26,600.
- Even if you qualify, waiting for funds to come through can take a very long time when thousands of other people are affected.
- If you do have earthquake coverage, you can qualify for an SBA loan to pay the deductible on your insurance.
So, for example, if your home is worth $400,000 and you have earthquake insurance with a 10% deductible, you could borrow $40,000 to cover the deductible and get $360,000 free and clear from your insurance company. Without insurance you would have to qualify for a $200,000 SBA loan, and somehow come up with the money to cover the other half of your loss – while still paying your original mortgage.
If you do purchase earthquake insurance in California, and your insurance company denies your claim, do what you can to defend your rights. As a litigation firm with a national reputation for aggressively litigating and consistently winning complex multi-million dollar cases, Callahan & Blain has developed an expertise in going after the insurance companies – and making them pay. After the Northridge earthquakes, our attorneys were able to obtain $800,000 in coverage for a client who had been denied coverage for her claims.
If your insurance claim has been denied, contact the lawyers of Callahan& Blaine for expert legal assistance.
