Quake insurance: Is it worth buying?

The 46-year-old seismologist heads the U.S. Geological Survey's Pasadena office, which monitors earthquakes statewide. She also has written a book about Charles Richter, who invented the scale for measuring the magnitude of quakes.

She's lived through a few big ones too, including the 1992 Landers quake and the catastrophic 1994 Northridge quake. And yet, Hough doesn't carry quake insurance on her vintage 1926 South Pasadena bungalow.

Instead, she has spent thousands of dollars bracing her chimney, strapping down her water heater and using plywood to shore up her home's cripple walls, the short stud walls that lie between the foundation and the floor of some houses.

"The thing about insurance is that to use it, you have to have a loss," she said. "I'd rather try to avoid the loss in the first place.' "

It's a strategy that Hough thinks more Californians ought to consider -- especially because so many of them don't carry quake insurance.

Despite dire warnings that Southern California is long overdue for the Big One, only about 1 in 8 Southland homeowners has quake insurance -- down from 1 in 3 homeowners a dozen years ago, according to the California Earthquake Authority.

Cost is one reason; high deductibles are another.

For a relatively new two-story home in Northridge, for example, buying $250,000 in coverage would cost a homeowner $625 a year through the California Earthquake Authority, the quasi-public agency created in 1996 to ensure the availability of quake insurance.

But a homeowner has to suffer more than $37,500 in structural losses before the policy will pay a penny. That's because the standard policy has a 15% deductible. And many items, including dishes and decorative objects, are not covered at all.

"This is what you buy to ensure that you're not living in the Staples Center," said Nancy Kincaid, a spokeswoman for the earthquake agency. "It doesn't pay for everything."

Still, some consumer advocates maintain that now is the time to reconsider. Premiums were reduced 25% to 30% in most parts of California last year, according to the earthquake agency, largely because there hadn't been a major quake that triggered huge claims since the Northridge one.

"With the price drop last year, it became a more reasonable choice," said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights in Santa Monica.