With the recent hike in earthquake insurance I did some calculations.
The insurance company claims my house should be insured for $350,000, and although I think it is high, they will not change it. My single-car 1936 era garage is insured for $35,000. B.C. Assessment values my house at $105,000. The earthquake insurance has a $35,000 deductible. When I wanted to build a simple double car garage, the building estimate was around $20,000. Compare that to the insured value of my single garage.
I have not had a quote on rebuilding my house but it could be done for far less than the insured value, according to a few carpenters I know. If there is an earthquake and there is window damage or a wall collapses then it’s my responsibility up to $35,000. If the garage is totally destroyed, even though it has earthquake insurance, then I have to pay the full amount to rebuild it – $35,000 deductible, remember. After figuring this out, do I really need earthquake insurance?
Basically I am paying to cover my house and my garage but not really. If the house is mortgaged then there would be no question. Something to think about.