The coming of a California earthquake is certain and it's only a matter of time before it hits. Strangely, the people living in Cali are not showing enough fear of the impending catastrophe.
In a report published by realtor.com, government officials and insurance firms are sounding off alarm bells on the fact that only a small number of property owners have bought coverage against earthquake damage. This is in spite of years of information campaign. State statistics show that only 10 percent of homes in California have insurance for quakes.
With current strategies seemingly ineffective, authorities have decided to turn to graphic advertising with plans to use images of the aftermath of the Napa 6.0 magnitude earthquake that happened in August 2014. The budget for the said campaign is said to be around $11 million.
Heading the campaign is the state insurance firm California Earthquake Authority (CEA) which already announced a 10 percent reduction in earthquake policy costs just to convince people to get one. According to Insurance Business America, Glenn Pomeroy, CEO of CEA said, "I don't think we have been doing a good enough job [getting the message across] to California consumers that the risk of earthquakes is very real, that a damaging earthquake is going to happen again."
It was also indicated in the same report that pushing people to buy earthquake insurance affects not just homeowners but also investors of insurance companies. Many of them want high returns for their money despite the super low interest rates these policies offer.
Another challenge insurers must overcome is the role of the government in addressing disasters. There has been a big jump in the number of natural events like hurricanes and tornadoes that are being declared by the federal government as disasters. And this is largely the effect of that Hurricane Katrina had 10 years ago when the U.S. government was severely criticized for its poor response.
