California Insurance Commissioner Steve Poizner and California Earthquake Authority Chief Executive Officer Glenn Pomeroy yesterday urged homeowners to seriously consider securing insurance protection against the next big earthquake.

They raised the topic as the state geared up for a large scale earthquake preparedness drill called "The Great Southern California ShakeOut."

Noting that the vast majority of California homeowners do not have earthquake coverage, even in particularly at-risk areas, Mr. Poizner said policies offered by the CEA--a public-private entity formed in 1996 to provide catastrophic earthquake coverage to Californians--are affordable.

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

Mr. Poizner said the CEA is not tied to the general fund, so despite budgetary issues in the state, the CEA has plenty of capacity to pay claims.

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

Mr. Poizner noted, "Too many people are unprepared." He said throughout Los Angeles, Orange, Riverside, San Bernardino, Imperial, Kern and San Diego counties, only 14 percent of the population has earthquake coverage. Statewide, the number drops to 12 percent.

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

Mr. Pomeroy said that beyond purchasing earthquake coverage, homeowners should look to make structural changes on their homes to protect 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 Southern California.

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

Mr. Poizner said homeowners should use the ShakeOut event to review their own preparedness for an earthquake. California is long overdue for a major earthquake, he said, adding that too many people, including policymakers, are not prepared for when that major earthquake strikes.

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

Special Reports /

Officials Urge Californians To Prepare For Earthquakes

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