Get Finances in Order Before a Quake Hits

Before a disaster take photos of your belongings for insurance claims | Photo by Michael Macor/The Chronicle | post by Larry Clinton

“Earthquakes are an inevitable part of life in California, a threat we live with daily,” states a recent supplement to the San Francisco Chronicle. Bringing that closer to home, the paper declares: “Experts predict, and history suggests, that we are overdue for a major quake, particularly along the Hayward Fault in the East Bay.” On a personal note, my recollection of the 1989 Loma Prieta quake was that our floating homes experienced severe shaking while sitting on mud during a low tide at 5:04 p.m. The major damage was caused by piling collars that tore loose from a few homes, which had to be quickly tied off before the tide rose. A few household items were damaged by falling, but there were no reports of structural damage to homes. Of course, there’s no guarantee that Mother Nature will repeat herself the next time around.

The supplement continues:

People who have lost homes in disasters such as earthquakes and the California wildfires have discovered too late that their insurance coverage has not kept up with the rising cost of lumber, labor and other rebuilding materials. And standard homeowners’ insurance does not cover damage resulting from land movement or landslides, yet it is estimated that just 10% of California homeowners have quake insurance.

So talk to your insurer to make sure you have enough coverage but, for a quick reality check, ask a local contractor how much it costs to build per square foot and multiply that by your home’s size. One of the most painful post-disaster tasks is compiling an inventory of possessions so you can seek reimbursement. It’s far easier to put the list together beforehand.

Here are other tips for shoring up your finances:

Safeguard your documents: Keep a copy of your will, trust, birth and marriage certificates, Social Security cards, insurance papers, medical information, most recent tax return, receipts for high-ticket items and other important documents in a safe deposit box. You can also scan and save them to a DVD or flash drive, which you can give to a trusted friend or family member outside the region. Another option is to save them in the cloud.

Break out the camera: Your insurance will pay for everything you lost — up to your policy limits — as a result of a covered “peril,” such as fire. To get reimbursed for your personal belongings, most companies require a detailed inventory of every item lost, although some will advance a portion of your contents coverage without this list.

While your house is still standing, use an online inventory or app or print a blank one from the California Department of Insurance or consumer group United Policyholders. Store it away from your home or better yet, in the cloud. At the very least, take photos or videos of everything in your home and outbuildings, including the inside of drawers, cabinets and closets.

The full supplement is available online as a PDF.

Next, we’ll explore what kinds of coverage are available to floating homeowners.