March 21, 2008

Faults: It's Not Exactly Good Friday Fun (Sorry, We Couldn't Resist)

It's not exactly one of those feel-good Friday topics, but it is a reality of living in the Bay Area: earthquakes. And with the 140th anniversary of the 1868 Hayward Fault quake seven months away, and a recent history of major Hayward quakes every 140 years, the seismologists are out spreading the word.

A few precentages for Bay Area homes:

∙ Percent without earthquake insurance: >95
∙ Percent retrofitted to resist quake damage: <40
∙ Percent strengthened enough to remain habitable following "violent damage": <10

And of course, a few of the requisite quotes:

"The biggest small-building hazard, all the experts agreed, will be from what they term "soft story buildings" - the kind where garages or storefronts occupy most of the ground floor and the heavier floors lie above, raising the odds of collapse. Houses like those, whose fragile underpinnings collapsed throughout San Francisco's Marina district when the Loma Prieta quake hit just over 18 years ago, should be a warning sign for every building owner to retrofit, Brocher said. Unreinforced corner buildings, he said, are the most dangerous."
"In San Francisco, said Keith Knudsen of the national nonprofit Earthquake Engineering Research Institute, the downtown area south of Market, where well-engineered high-rises are rapidly filling the neighborhoods, would be particularly dangerous in a major quake because the low-lying filled land there is subject to liquefaction.
Those new buildings might well remain standing in the coming Hayward quake, he said, "but if the streets there settle by a couple of feet, those buildings will be isolated.""

And as much as we couldn’t resist the headline, we equally couldn’t resist the categorization.

Next big quake could be worse than 1906 [SFGate]

First Published: March 21, 2008 6:33 AM

Comments from "Plugged In" Readers

Regarding the minor markup glitch in the post as it first appeared to me while browsing with Firefox, I think adding a semicolon just after the greater than/less than symbol strings will make them work as intended. Here is a test: >95, <40

Earthquake insurance is extremely limited in nature. There is an argument to be made that simply making the same payments into a savings account would amount to better preparation, even with record low interest rates.

Posted by: Mole Man at March 21, 2008 8:51 AM

"Earthquake insurance is extremely limited in nature. There is an argument to be made that simply making the same payments into a savings account would amount to better preparation..."

Agreed. Even better, invest the money into seismic retrofitting.

Posted by: The Milkshake of Despair at March 21, 2008 9:02 AM

How does government bailout work in a disaster? Would it make sense to remain fully leveraged on one's home, and just let the bank and government take the hit (the American Way)? I can see that those responsible to payoff their homes would benefit least. But what are the historical trends on bailouts?

Posted by: TypeA at March 21, 2008 9:12 AM

"How does government bailout work in a disaster?"

Katrina

Posted by: The Milkshake of Despair at March 21, 2008 9:15 AM

"How does government bailout work in a disaster?"

FEMA trailer. I guess the value of your FEMA trailer will multiply within a very short time. Realtors will tout the advantages of living in FEMA trailers vs. real homes and Ben will print some more money. Then the game will go on as if nothing had happened. America is a great country.......

Posted by: anon at March 21, 2008 10:28 AM

Speaking of Katrina, it taught us that you'd better have 5 gallons of water per person in your home (as opposed to 3 gallons) - Katrina folks had to wait 5 days in some cases before they received help. In the past, it was thought that our federal government could help in 3 days - but not anymore.

While you can go without food for awhile, everybody needs water for their body to continue functioning.

www.72hours.org
www.Ready.gov

Posted by: jamie at March 21, 2008 10:51 AM

I have about 5 gallons of whiskey and cognac in my house. Will that be enough to survive until Uncle Sam saves me?

Or will I have to tap into my stash of Cult Cabs in the wine fridge?

Posted by: Jimmy (Bitter Renter) at March 21, 2008 11:17 AM

we are newly retrofitted and pay for the insurance.... which would give us something after like $130K in damage or something. I know we should consider the risk, our assets, and the value the insurance provides... but when it's late at night, and we have those little 3.0 quakes and the house creaks and moves (only 1/4 mile from the Hayward fault so tiny quakes feel big) it all seems worth the money.

Posted by: crockergal at March 21, 2008 5:02 PM

I moved here about 5 years ago, and bought in a supposedly "earthquake engineered" building. I wanted to be safe, and not end up like the marina when (not if) it goes. Our building has earthquake insurance, but as one of our board in the insurance biz said, if it gets to the point where we're going to collect, the insurance industry is pretty much guaranteed to be bankrupted, so don't expect it to be worth anything.

I say "supposedly", because truly engineering something requires testing to be provable, and they didn't earthquake test this building. Still, I hope.

Posted by: whorfin at March 21, 2008 9:33 PM

Not all insurance is the same. You can buy insurance from private insurance companies instead of CEA. You will get better coverage including (and this was important to me) loss of use coverage and real contents coverage. As for an earlier reference to "...the insurance industry is pretty much guaranteed to be bankrupted...." I suggest being very selective about which insurance company you select. I chose Fireman's Fund which is a wholly owned sub. of Allianz, one of the biggest P&C insurers in the world.

Posted by: CW at March 22, 2008 6:39 AM

why bother with eq insurance. i pay $2600 a year for it and now realize that a big quake will go down the same way as the "housing crisis" is playing out.

Those that made smart choices and planned well will watch the government bail out the whiny masses. now, after i spent years building a great credit rating, saving all my money to buy a home, and looking up the definition of negative amortization before signing for a mortgage, i get to watch all the poorly prepared folks showered with sympathy and probably some form of bailout. after the big quake I'll pay my $100 grand deductible and wait a year to receive an insurance settlement before rebuilding, while watching all the "poor cheated ruined defenseless homeless" uninsured get bailed out by the government. or watch them just walk away from their underwater homes laughing.

hint: if you can't afford earthquake insurance,you probably can't afford your home.


Posted by: resp at March 22, 2008 7:31 AM

Anyone who wants to see how great insurance will be in a real catastrophe should find the CSPAN videos of Senator Trent Lott R-Miss. get all worked up yelling and screaming at insurance executives in senate hearings because after more than a year he had not received any sort of settlement on his destroyed home. Poor Trent (who I have little real sympathy for) even almost lost his helmet hair toupe as he became more and more furious. Of course after the hearing he immedialy received full value for his ruined waterfront mansion, but few others did.

Posted by: anonfedup at March 22, 2008 8:47 AM

agreed on all of it.... we also bought Fireman's Fund EQ insurance for the loss of use and contents coverage, it was a big reason we bought the coverage. I hope I don't have to go all "Trent Lott" to collect, but I have the money to sue... and I love a good fight. And in the grand scheme of things, for a big house, the insurance expense is not so expensive.

Posted by: crockergal at March 22, 2008 9:11 AM

Can you get Fireman's Fund coverage for your rental? (I have CEA right now via Farmer's).

Any tips on how to aquire it via Fireman's fund?

Posted by: High Rise Harry at March 22, 2008 9:28 AM

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