Because of the hurricane damage in FL over the recent years, fears were validated and there is a greater need for the peace of mind that the insurance policy provides.
When several years escape us without incident, we become complacent. The risk is still real, so yours is a very good question. The answer, however, is an individual one. The emotional and stress reaction you have to "What if....?" will help you measure your own risk tolerance.
When I worked as a disaster loan officer I saw hundreds of files from the 2001 Seattle (Nisqually) earthquake. Fortunately, no one died directly from that quake, but there were billions of dollars of damage. mostly in $15,000 to $25,000 chunks as people had to fix chimneys, doors, windows, and yes foundations.
EQ insurance is ghastly expensive, has huge deductibles.
I don't buy it myself as there is no fault zone within 50 miles of me. - it depends on your risk comfort level whether to pay for the "peace of mind"
It turns our that we live right in between two famous faults, isn't that sweet. So we have continued to pay for the insurance, I don't even ask how much it costs. To me, this is something for catastrophic purposes, and hopefully we never have to use it and buys me just a lttle peace of mind.
Anyway, I got curious, so I looked online and found a nice article http://moneycentral.msn.com/content/Insurance/Insureyourhome
In the article there is a link to 'Fortified ... for a safer living'... will also be a good read.
From what I've been told from by the insurance company that I have, earthquake insurance is only provided by the California Earthquake Authority, their link is here: http://www.earthquakeauthority.com/. The link has educational information on it including calculating your premium, participating insurance providers, earthquake safety, etc.
I am not sure how true that statement is that only CEA provides insurance since my knowledge comes straight from my insurance provider, Liberty Mutual, and not my own personal research. But from what I've seen all of the bills that I receive for my earthquake insurance basically comes from CEA. Liberty Mutual just is the funnel in which it goes through to get to me. I'd say get it! It's a must for the peace of mind as others have already said.
The most important upgrade to do is to make sure that the house is actually attached to the foundation. Believe it or not, many older homes are just "resting" on top of the foundation. When an earthquake occurs, the house slips off the foundation and then collapses. A few steel straps and hold downs can go a long way in keeping your home together in a seismic event. And, the cost of such an upgrade is usually around $2500-$4500 depending on the size of the home.
Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if the entire home is destroyed, but not useful if the home is merely damaged. Rates depend on location and the probability of an earthquake. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick.
As with flood insurance or insurance on damage from a hurricane or other large-scale disasters, insurance companies must be careful when assigning this type of insurance, because an earthquake strong enough to destroy one home will probably destroy dozens of homes in the same area. If one company has written insurance policies on a large number of homes in a particular city, then a devastating earthquake will quickly drain all the company's resources. Insurance companies devote much study and effort toward risk management to avoid such cases.
Earthquake insurance has become a political issue in California, whose residents purchase more earthquake insurance than residents of any other state in the U.S. After the 1994 Northridge earthquake, nearly all insurance companies completely stopped writing homeowners' insurance policies altogether in the state, because under California law (the "mandatory offer law"), companies offering homeowners' insurance must also offer earthquake insurance. Eventually the legislature created a "mini policy" that could be sold by any insurer to comply with the mandatory offer law: only structural damage need be covered, with a 15% deductible. Claims on personal property losses and "loss of use" are limited. The legislature also created a quasi-public (privately funded, publicly managed) agency called the CEA California Earthquake Authority. Membership in the CEA by insurers is voluntary and member companies satisfy the mandatory offer law by selling the CEA mini policy. Premiums are paid to the insurer, and then pooled in the CEA to cover claims from homeowners with a CEA policy from member insurers. The state of California specifically states that it does not back up CEA earthquake insurance, in the event that claims from a major earthquake were to drain all CEA funds, nor will it cover claims from non-CEA insurers if they were to become insolvent due to earthquake losses. Most policies are becoming more affordable again. Many of my clients are purchasing policies and I would recommend doing so even if it is costly. It is better to be prepared.
I think the best advice is for home owners to understand how close to a fault line they are, what year the home was built, how much it is worth, etc. and talk with their insurance agent to evaluate the risk.
Seems like it is not a bad thing to have given the likelihood of another big one. I have it.