California earthquake insurance?

I live in California. I've had earthquake insurance on my house since
the day I bought it in 1989.

My policy renews every year in June. This year, I received notice that
earthquake coverage would no longer be offered by my primary carrier.
Until now, the premium for that coverage was $250. $1000 deductible,
full replacement cost plus contents, liability and medical, and we've
kept the amounts current to the replacement value of the property.

Instead, my carrier said, I can buy separate earthquake insurance from
an outfit called CEA, or California Earthquake Authority. From what I
gather, CEA is a privately funded publicly managed organization that
fulfills the mandate that insurers in California must offer earthquake
insurance.

The premium jumps to a whopping $631.00, and the deductible jumps to a
whopping $57,000 for a $380,000 home.

From what I've read, the premium and the deductible is so high because
CEA is required by law to have sufficient funds to cover losses in a
"500-year event." They have about $4 billion in reserve, which is not
enough, so they spend 40% of that on supplemental insurance in case of
such an event.

I don't live in LA or San Francisco. There are no major fault lines
near my home, although there are lots of little ones. I've lived in
this town since 1951 and the biggest earthquake I've experienced was
about a 5.3, fifty miles away. Strong enough to knock some dishes off
their shelves but that's about it.

I don't think this is a good deal. If there's an earthquake strong
enough to cause $50,000 worth of damage to my home, I'd be better off
getting a loan to cover it. Anything over that, I'd torch the place and
move on.

What do you think?

Frank

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