Should I Seismic Retrofit foundation?

[Mark De sagun]

Hi everyone! My girlfriend and I just bought our first house hack in Los Angeles. The house was built in 1914. During inspection, we were told that we need to Seismic Retrofit the foundation; bolt down, upgrade posts and piers, and support cripple walls. We got estimates for $15k and $8k to have the work done and were credited some money by the sellers for repairs before closing. But yesterday, a General contractor told us that we might just want to leave the foundation as is because retrofitting won’t guarantee that the house would still be standing after an earthquake. So now we’re thinking of just leaving the foundation alone and getting earthquake insurance instead to cover us. What do you guys think? The GC suggested we change out any galvanized piping left instead. Would love to hear different opinions and advice. Thanks!

[Aaron K.]

Earthquake insurance is very expensive it would probably not be cheaper than leaving the foundation.  Not sure what type of foundation you have or if this is a soft story retrofit but I'd listen to the experts not the GC who wants you to spend your money with him.

[Mark De sagun]

@Aaron K. Thanks for your input. I was actually surprised EQ insurance wasn't more. I got quoted for about $60/mo for a 15% deductible. Well the GC is actually an investor himself who's company could do the seismic retrofit so I was really surprised he suggested not doing it. It's the structural engineers that I'm worried are just telling me it has to be done so that I spend the money to retrofit it. 

I guess the choice I'm struggling with is if I should pay the $10k to retrofit the foundation, leave the foundation and get EQ insurance, or retrofit the foundation and get EQ insurance? 

Scenarios:

a.) I pay to retrofit, if an earthquake comes, the retrofit could help or it could still be a total lose depending on the magnitude of the earthquake. 

b.) I don't retrofit but get EQ insurance and if an earthquake comes, at least I'll be in a better position to rebound financially if it's a total lose.

Any owners out there with older properties that have decided not to seismic retrofit their rentals?

[Aaron K.]

@Mark De sagun even at $60 per month which is less than I was expecting you'll be essentially doubling your insurance premium forever and even if a quake comes with a 15% deductible you're still out of pocket $50k or more.  The rate is probably so low because the deductible is so high.  Standard insurance usually has a deductible of 1%-5% in most cases.

[Boris Suchkov]

@Mark De sagun I'm curious as to what you decided to do. I'm looking to do a seismic retrofit for a house in Pasadena. I got four quotes from four contractors for a "brace and bolt" retrofit. The foundation is concrete masonry (grouted cinder blocks). Two contractors said we can't do it because with masonry foundations we either won't get the building permit, or if we get the building permit, it will fail the inspection. The other two contractors said yes, we can do it and gave quotes of around $8-10K.

Who is right? I'm now thinking of hiring a city inspector for a private consultation to get them to look at the foundation and say if, given the described work, they would sign off on it. Does that sound like a good idea? (Maybe an inspector from another city - everyone uses LA City plans, it doesn't have to be a Pasadena inspector).

[Sebastian Marroquin]

There's a lot of "what Ifs" in this conversation... 

This is more for peace of mind really... This is a lot like getting car insurance: we all hope for an accident never to happen, and always glad to have the insurance when it does! 

I happened to be talking to my architect when writing this comment and asked him about it. He is on the same page as me. 

If you can afford it, then get the retro-fit and the insurance as it will protect you and the home even more. But just know that if the earthquake is big enough, the retro-fit won't help much and unfortunate the insurance will but you may not be alive for it. 

It's all about preparation and pre-planning. You worked hard for your investment and I know $60 a month digs into your investment or returns... but you will thank yourself if something happens and you need to use the insurance. 

I would say, do your numbers and let the math make your decision. Consider what someone said on here about the deductible: a super high deductible will make the insurance worthless, as you won't have the money for the deductible anyway... 

** by the way, as a realtor, almost 100% of our clients that buy homes are told by inspectors that the home's foundation needs a retro-fit. Almost 100% of them do not do it. I do recommend you go to "foundation works" or Alpha (google them) and get a foundation specific inspection : they will give you (usually) 2 bids: one for an immediate fix on the foundation : and the other bid for retro-fit. (retro fit with them is usually about 25k to $35k ) : 

I would recommend you do the immediate work with a contractor or them (a license contractor will be a fraction of the cost). 

Assess: do your math: decide. 

Good luck. 

[Mark De sagun]

@Boris Suchkov @Sebastian Marroquin

Thanks for your reply! So I ended up not doing any upgrade to the foundation and just getting earthquake insurance. The policy premium is $70 a month and deductible is $40,350. I may have the foundation retrofitted sometime in the future, but not now. Felt like the insurance provided more safety than the retrofit.