California Insurance Commissioner Steve Poizner and CaliforniaEarthquake Authority Chief Executive Officer Glenn Pomeroyyesterday urged homeowners to seriously consider securing insuranceprotection against the next big earthquake.

They raised the topic as the state geared up for a large scaleearthquake preparedness drill called "The Great Southern CaliforniaShakeOut."

Noting that the vast majority of California homeowners do nothave earthquake coverage, even in particularly at-risk areas, Mr.Poizner said policies offered by the CEA--a public-private entityformed in 1996 to provide catastrophic earthquake coverage toCalifornians--are affordable.

According to the CEA it could pay up to $7 billion in claims ifa 7.8 magnitude quake were to hit Southern California where theAuthority has 535,000 policyholders.

Mr. Poizner said the CEA is not tied to the general fund, sodespite budgetary issues in the state, the CEA has plenty ofcapacity to pay claims.

The Risk Management Solutions modeling firm reported last monththat a big quake along the entire length of the Hayward Fault,which includes the San Francisco Bay Area, would result in economiclosses between $210 billion and $235 billion, and only $30 billionof the loss is likely to have insurance coverage.

Mr. Poizner noted, "Too many people are unprepared." He saidthroughout Los Angeles, Orange, Riverside, San Bernardino,Imperial, Kern and San Diego counties, only 14 percent of thepopulation has earthquake coverage. Statewide, the number drops to12 percent.

Many people avoid purchasing coverage because they expect thefederal government to make homeowners whole after a loss, but Mr.Poizner said the federal government does not provide funds unlessthere is a national disaster declared. Additionally, he said,assistance provided by FEMA will not be adequate enough to coverthe cost of damage for homeowners.

Mr. Pomeroy said that beyond purchasing earthquake coverage,homeowners should look to make structural changes on their homes toprotect them from earthquakes.

The ShakeOut drill is taking place tomorrow at 10 a.m. PST.According to the ShakeOut Web site, millions of people will "drop,cover and hold on" to prepare for a major earthquake in SouthernCalifornia.

The drill is being organized by a collaboration of nonprofit,business, government and education partners within the EarthquakeCountry Alliance, which is a public-private partnership of leadingearthquake professionals, emergency managers, government officials,business and community leaders, and others.

Mr. Poizner said homeowners should use the ShakeOut event toreview their own preparedness for an earthquake. California is longoverdue for a major earthquake, he said, adding that too manypeople, including policymakers, are not prepared for when thatmajor earthquake strikes.

Referencing the wildfires that have ravaged areas of California,Mr. Poizner said, "I've seen firsthand the devastation that happensto a family when they lose their home." A major earthquake, heexplained, would affect people on an even grander scale than thewildfires.