Earthquakes conjure up a certain level of discomfort with me. The Thought of my San Francisco apartment building crumbling To The Streets Is not pleasant, however I do NOT carry earthquake insurance. There Have Been No Shortage of Opportunities WHERE year investor Asked what i think about earthquake insurance, so I figured It Was Time To Lay Out The Costs and Benefits Carrying Such A gold policy.
In this week's video Interviewed PJ Tradelius weekends, The President of Commercial Coverage, Who we grilled for about 15 minutes The Pros and Cons of earthquake insurance. Basically, It Comes Down to Thesis 4 Factors:
1. Location: How close is it to a fault line, and is it in a liquefaction zone? 2. Construction type: Most apartment buildings are bay area wood frame built over a concrete foundation, Which Is Better Than Worse Than brig purpose steel construction. 3. High Leverage: If There Is a large loan, The loan reservations Itself As An insurance policy should "There Be a Catastrophic earthquake. 4. Large equity position: If a building IS owned Free and Clear, The high premium and high deductible Associated with earthquake insurance May Make Sense.
What Percentage of replacement value are premium? How High Is A typical deductible? Click the video is to find out!
