According to the Miami Herald, disaster insurance may not always be safe bet for homeowners. Although insurance companies do their best to reduce the risk of going bust, concerns remain. The 6.8 quake that hit Northridge, California in 1994 caused so much damage that insurers paid out more in claims than they collected in premiums over the previous 30 years, which nearly created another disaster for homeowners. The industry also has issues with manpower shortages.
Steven Steckler, president of the Sentry Claims Group in Louisiana — an independent adjusting service — says most, if not all, insurance companies have the resources to cover their insured clients’ losses, largely because only about 10 percent of all homeowners have earthquake coverage. We’ll come back to that shortly.
But there’s another problem: Should another major quake strike — and they have occurred in 42 states — there’s “no way” companies could put enough boots on the ground to assess owners’ claims and get them the money they need to begin repairs, Steckler says.
For one thing, there just aren’t enough adjusters. For another, there isn’t enough infrastructure to support them. In a major quake, roads and bridges will be destroyed, so adjusters won’t be able to reach people.
