Earth Quake Insurance —- To get or not to get???

[Alvin Uy]

Those of you who invest in California or Pacific Coast that own property,  what are your thoughts on Earthquake insurance?   Do you have them for your properties?   Is it worth it?      If not, what will you do in an event of a major earthquake??

[John Barrett]

@Alvin Uy I think about the cost of the insurance in comparison to how much equity you have in your properties.  We have seen large growth in the value of our portfolio so protecting that value with insurance makes sense.  As such, we carry earth quake insurance on all our rentals along with loss of rent provisions.  We went through a broker and the rates were expensive but not terrible.  There are a lot of different major companies selling insurance policies.  If you are concerned about any specific one, you could always move your coverage to a different company.

Insurance is simply a means of transferring risk that people do not want to accept.  There is no universal right answer, just like investing, everyone's level of risk tolerance will be different.  All you need to do is determine your level of comfort with taking on the risk of loss from an earth quake.

Best of luck,

John Barrett