United Policyholders Urges Homeowners to Reconsider Earthquake Insurance After 7.2 Temblor Shakes Mexico and San Diego

SAN DIEGO, CA, Apr 06 (MARKET WIRE) --
Sunday's magnitude 7.2 earthquake, just 40 miles south of the USA-Mexico
border, is a reminder to all Californians that the next big quake could
happen any time. If you own a home, San Francisco-based insurance
consumer rights organization United Policyholders ("UP") says now is the
time to reconsider whether earthquake insurance is right for you.

Today UP called on Congress to enact SB 886 or HR 4014, either of which
would make earthquake insurance more affordable so more Californians will
have the funds to repair and rebuild. According to UP, 88 percent of
California property owners do not have insurance to cover quake damage.

"We have been in the post-disaster trenches for 19 years and can say for
sure that FEMA and other government aid programs simply will not cover
the cost of repairing or rebuilding after a major quake. People without
insurance will largely be on their own," says Amy Bach, Executive
Director of United Policyholders.

Despite the recent slump in housing values, most homeowners in California
have gained equity especially if they have been in their homes for a
number of years. United Policyholders reminds consumers that opting to
"go bare" -- i.e., forgoing insurance for quake damage -- is a decision
that anyone with equity in their home should not make without getting a
few quotes and doing the math.

"Most homeowners assume earthquake insurance is not worth buying, so they
don't take the time to weigh their individual risk factors against actual
cost estimates," said Bach. "Don't assume you can't afford it or that
it's not worth it until you've researched the likelihood and potential
dollar amount of damage to your particular home. If you live in a
quake-prone area and you can afford it, the best way to protect your home
is to retrofit, buy earthquake insurance and set aside funds to pay for
repairs below your deductible."

Earthquake insurance won't pay for small cosmetic repairs, but it is a
safety net for the kind of catastrophic property damage we saw in
California after the Northridge and Loma Prieta quakes and in Haiti. The
"Buying Tips - Earthquake" section of www.uphelp.org offers tips,
articles and links to help consumers make the right individual decision
about EQ insurance. Among the factors to consider:

What is your risk profile: How close are you to a fault line? Do you have
a slab or a post and pier foundation? Is the home wood-frame
construction? Is it a "soft story" home (living area built over a
garage)? Are you on bedrock or fill? How much equity do you have in your
home?

Enter your address at http://myhazards.calema.ca.gov to learn about the
soil conditions and quake forecasts where you live. Read at least one of
the articles by financial experts at www.uphelp.org on equity
considerations.

At what level of loss would the repair/rebuild of your home be an
unacceptable financial burden? Can you afford a policy with a 10 percent
instead of a 15 percent deductible and if so - how much would the damage
have to be before coverage would kick in? The price and high deductibles
for EQ policies have led many people to avoid buying the product, but
remember: if you live in a quake-prone region, going "bare" with no
insurance means you have a 100 percent deductible...you'll bear the
entire risk yourself. Get at least two quotes for earthquake insurance,
preferably with a 10 percent deductible.

Do the math... Can you afford not to have earthquake insurance? A
generally accepted rule of thumb is that you should not risk more than 10
percent of your liquid assets. A large earthquake could mean:

-- 10 to 100 percent of your home's structure could be damaged or
destroyed
-- Up to 20 percent of your belongings could be damaged
-- $3,000 a month for temporary rent and relocation costs

Because UP recognizes that earthquake insurance is too expensive for
many homeowners, the organization is working to help bring down the cost.
UP supports Senate bill 866 and House Bill 4014 -- concurrent bills that
would reduce the cost of the EQ insurance sold by the California
Earthquake Authority. The Catastrophe Obligation Guarantee Act allows the
CEA to substitute a portion of its high-cost reinsurance with an ability
to borrow money in the private debt markets - after an event, and backed
by a federal guarantee -- allowing the CEA to:

-- Lower the cost of policies by approximately 35 percent - saving
consumers nearly $1 billion over the next 5 years, and;
-- Lower deductibles by at least 50 percent -- making the insurance far
more likely to cover claims that will arise from the earthquakes
experts say are inevitable.

UP is calling on Congress to make earthquake insurance more
affordable so Californians will have the money to repair and rebuild. UP
urges all Californians to support these bills by writing their elected
officials.

For more information to help you decide if earthquake insurance is right
for you visit www.uphelp.org and read UP's buying tips to see what your
options are, and what factors to take into consideration when shopping
for the right earthquake policy.

About United Policyholders
United Policyholders is a national
not-for-profit organization dedicated to integrity in the insurance
system and to educating the public on insurance issues and consumer
rights. For a complete listing of services and to access UP's extensive
library of buying and claim tips for consumers, please visit
www.uphelp.org. UP is the publisher of the Disaster Recovery Handbook and
Household Inventory Guide, known as the "Little Yellow Book" that has
guided thousands of disaster victims on the road to recovery.

Contact:
Amy Bach, Executive Director, (415) 393-9990 (Northern California)
Karen Reimus, Outreach Coordinator, (858) 414-9756 (Southern California)

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