Sound Off: Do you recommend homebuyers invest in earthquake insurance? Why or why not?

Q: Do you recommend homebuyers invest in earthquake insurance? Why or why not?

A: This is a common question that often is asked when exploring insurance options. It also depends on what kind of property the buyer is purchasing.

In condos, the insurance is normally covered by the Homeowner’s insurance, and very few condo associations have earthquake insurance, due to the high deductibles premiums. These costs tacked onto the monthly HOA fees can get pretty expensive. Many times the HOA members (owners) do not vote in favor of having it. You cannot have earthquake insurance on an individual unit in a condo building.

However, please note condo dwellers and renters, they have policies that cover your personal property and unit improvements. In the 1989 earthquake, Marina residents I know that had their belongings insured, found out it really helped them to furnish their new home when they moved to a more solid land base.

I had clients who lost everything in the Kobe, Japan earthquake years ago, so they were adamant about purchasing earthquake insurance at closing. Cost to them was not an issue.

Contrary to some out-of-the-state buyer’s thinking, lenders do not require earthquake insurance. If you have an all-cash purchase, then it definitely makes sense to protect your investment.

This decision basically comes down to personal preference and a buyer’s comfort level.

Jeannie Anderson, Compass, 415-271-4887, jeannie.anderson@compass.com.

A: Since we live in earthquake country, I do recommend that homeowners get an earthquake insurance policy. Homeowners need to ask themselves if they could afford to rebuild their home and replace their personal belongs if an earthquake hit. This would not be covered by your regular...