A minor 3.6 magnitude earthquake that occurred Oct. 18 in central California will not significantly affect homeowners of earthquake insurance premiums, but it is a reminder of the risk.
The epicenter of the earthquake, which caused little or no damage, was near Ridgemark, according to the San Francisco Chronicle. The census designated place is located just south of Hollister and about an hour drive south from San Jose.
Although it was the most powerful earthquake in California in the past week, it was far from the most powerful that has occurred in the state even this year. Quakes with a magnitude as high as 5.4 are often felt but cause minimal harm to structures. Thousands of quakes like the latest one in Ridgemark happen every year in California and go largely unnoticed.
Smaller quakes are quickly forgotten because they don’t cause structural damage – in large part due to the way structures are now built – and the most recent Ridgemark earthquake falls in that category.
The cost of homeowners and earthquakes insurance policies should remain the same in Ridgemark for that reason. Only an earthquake of unanticipated strength or a change in the risk of a large earthquake occurring might affect rates.
For example, it’s possible that catastrophe models could underestimate the damage caused by an event and decide to increase rates as a result. But a devastating earthquake doesn’t need to occur to warrant higher premiums. Risk modelers are constantly monitoring and evaluating the risk of earthquakes throughout California. If there is reason to believe the risk has become greater in an area, then insurers might increase rates there.
But Ridgemark residents, like many others in central and southern California or even Oregon, are in a place where a serious earthquake could happen. It is relatively nearby three major faults (the San Andreas, Hayward and Calaveras) as well as a number of lesser-known ones (including the Silver Creek, Butano and Quien Sabe).
A report on the outlook for earthquake activity in the San Francisco Bay region by the United States Geological Survey (USGS) for 2014 to 2043 estimated that at least one earthquake of a magnitude 6.7 or greater has a 72% chance of occurring.
A 6.7 magnitude earthquake is capable of causing serious damage across large areas. Unlike the one in Ridgemark, an earthquake of that magnitude is capable of damaging even specifically designed structures and collapsing other structures.
Remember, homeowners insurance does not cover earthquake damage to a policyholder’s home or belongings but it protects it from other perils as a result of an earthquake. For example, if an earthquake somehow starts a fire that damages a home or a policyholder’s personal property, their homeowners insurance policy would cover that.
The article What A 3.8 Magnitude Earthquake Means For Homeowners In California originally appeared on ValuePenguin.
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