Few know the risk of living in earthquake country quite like Susan Hough.
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.
The group, which recently changed its position, advocates buying coverage. "The number of uninsured homes is a financial disaster in the making," Heller said.
But quake coverage still isn't cheap, and some people such as Hough believe that, given the high deductibles, their money is better spent on safeguards to help their homes ride out a quake with as little damage as possible.
Unsure whether you should buy quake insurance? Here are some factors to consider.
The stake in your home
If you don't have much equity in your home or if it is worth less than you paid for it, there is less value to protect. People in this situation simply may decide to walk away if their homes are destroyed in a quake and let their property fall into foreclosure.
That happened plenty after the Northridge quake, when housing prices had fallen sharply after the 1989-to-1990 peak.
But if you have a lot of equity in your home, you stand to lose much more in a catastrophic quake.
"Your home is probably your single biggest asset," said Kincaid of the California Earthquake Authority. "The question the homeowner needs to ask is, 'How do I manage my risk?' "
Those who have plenty of other assets can choose to in effect self-insure, including setting aside some money each year to cover repairs. But they also have to be prepared to borrow against their home in the event of a disaster that exceeds the size of their repair fund.
Some people mistakenly think that the federal government will bail out homeowners in the event of a massive quake. But government assistance usually is in the form of loans, not grants.
"Are you in a position to cover hundreds of thousands of dollars in losses?" Allstate Insurance spokesman Rich Halberg asked. "A 15% deductible is a lot. But it's nowhere near as much as 100%."
Condition and location of your house
Some homes and locations are more at risk than others to be severely damaged in a quake. Hough said she would buy quake insurance if she lived near the beach or a riverbed, where the ground is prone to liquefaction.
"When you're in the hills, for the most part, you're better off because you are on rock," she said. "If you are on soft sand, your risk is higher because the ground can shake like mad."
A website partly sponsored by the California Earthquake Authority and other public agencies, www.earthquakecountry.info provides maps of known fault lines and information about quake risks. One map, called Earthquake Shaking Potential in Southern California, shows regions near active, major faults.
