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The Cost of Earthquake Insurance Can Be Reduced

The Cost of Earthquake Insurance Can Be Reduced

Many commercial property owners, especially along the West Coast, are concerned about the cost of earthquake insurance.  California property owners are well aware of the fact that their building may be located near one of the many active faults that run through the state.  Property owners and commercial management teams have also heard the dire predictions that California is due for a mega-quake at some point in the next 20-30 years.  This predicted earthquake is expected to measure well above an 8 on the Richter scale and could cause major damage and destruction over a wide area.

Since California is located on or close to so many fault lines, including the great San Andreas Fault, most folks in the United States assume that residents and property owners would automatically purchase earthquake insurance. Unfortunately, that is not the case.  In fact, only about 12% of property owners (residential and commercial combined) are successful in getting affordable earthquake insurance.  Certainly cost is an issue, however for many property owners, coverage is simply denied because their building is not strong enough to withstand extremely powerful seismic activity.

Earthquake insurance in California is very costly especially since earthquakes are the most expensive natural disaster from which to recover.  Many property owners cannot easily afford the expensive premium and choose to forego the additional expense of this insurance coverage. Commercial property owners who are actually able to get an earthquake insurance policy find that the deductibles are set higher than expected and the actual coverage is not high enough to entirely protect the owner if a temblor causes catastrophic damage. Earthquake insurance coverage typically does not fully protect a property owner when the property is completely destroyed.

For commercial property owners throughout the state, including owners in and around the Los Angeles area, who have been contemplating purchasing earthquake insurance, the following important points must be considered:

  • If your property is heavily damaged or even completely destroyed, you will still be responsible for any remaining mortgage balance.
  • Because building structures that are more than 25 years old were not constructed under the current and stricter building regulations, they are more likely to sustain devastating damage when the earth starts to move and shake.

Often, commercial property owners and property managers struggle with this important question:  how can I get coverage for my building at a rate that is affordable?  All financial institutions are concerned with minimizing the amount of risk they carry.  Insurance companies, along with most banks, look at the overall safety of a building structure, along with the Probable Maximum Loss or PML rating, when making coverage or lending decisions.  They know that older buildings constructed before the current building codes were in place are probably not strong enough to survive the mighty forces of a mega-quake without additional upgrades and maintenance.

Lenders and insurance companies are often satisfied after a comprehensive retrofit is professionally completed to strengthen a commercial property.  Insurance companies need the assurance that the buildings have been reinforced in such a way as to minimize the possibility of catastrophic damage and total property loss.  An earthquake retrofit is a cost effective way to protect your property, especially if you are looking to purchase affordable earthquake insurance.

Commercial property owners in the Los Angeles area can obtain a professional quote to determine if an earthquake retrofit will help reduce the cost of earthquake insurance.  Saunders Commercial Seismic Retrofit can thoroughly inspect your building to determine any maintenance and strengthening needs.  Their professional team will provide commercial property owners with a solid cost estimate and insurance quotes to help clients calculate the return on their investment.  Scheduling an earthquake retrofit before the next major underground activity will be less expensive in the long run and will provide a safer building for employees, tenants and customers.  Statistics have shown that it costs more to fix major damage or rebuild after a mega-quake.  Call Saunders Commercial Seismic Retrofit today for further information and an estimate for an earthquake retrofit on your commercial property.


Southern California Office

(949) 646-0034

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