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Business

The Big One: Insuring a future after the shake

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Opening sequence

Business

The Big One: Insuring a future after the shake

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COMING UP:The Big One: Insuring a future after the shake

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Transcript

00:00:00
>> Glenn Pomeroy is on a mission, convincing Californians to buy earthquake insurance. And he's taking his message to whomever will hear him out.>> If you're sitting here today and don't have earthquake insurance, don't feel bad.>> He's the CEO of the California Earthquake Authority, set up by the state legislature after the 1994 quake in LA.
00:00:20
When insurance companies were refusing to sell earthquake insurance due to big losses. The authority offers earthquake insurance to homeowners and renters, so no one is rejected. Scientists say the US west coast is due for the big one any day. In California, the San Andreas fault and Hayward fault are ready to go off.
00:00:40
And further north the Cascadia subduction zone could even set off a quake with a magnitude of over nine. I'm Reuters' Jane Lanhee Lee. And the authority estimates that when the big quake hits California it could cause $175 billion in residential damages. And less than 15 billion of that will be covered by insurance.
00:01:01
And that's not even counting damages of bridges, roads, and businesses.>> The perception is that earthquake insurance is expensive, and the deductibles high. But Glenn says the the authority this year introduced a more flexible plan and has lowered the cost. And he's trying to convince homeowners to give it another chance.
00:01:20
Unlike hurricane insurance which is often mandatory in Florida, earthquake insurance is voluntary.>> We saw the political turmoil that followed the Affordable Care Act when for the first time people were required to obtain health insurance. I think that has left us with a political environment in which mandating earthquake coverage is probably not gonna happen any time soon.
00:01:42
>> But convincing homeowners to fork out for insurance is a challenge. So the authority is even offering grants for them to shore up the structure of their homes to withstand the big shake. Californians are lucky. In Oregon and Washington, where they are bracing for that magnitude nine quake and tsunamis.
00:02:00
There's no guarantee homeowners can get earthquake insurance.