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When insurance rates get affected...

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Christopher Wright was very perceptive when he stated: 

"The 'public' buys on price and they aren't much interested in technical
education, but they'll come around when insurance rates get affected."

Since 1994 in California, residential earthquake insurance premiums have
skyrocketed and deductibles have increased from 10% to 15% and legal-minimum
covered was decreased. Homeowners realized they were paying a lot more for a
lot less insurance. The new California Earthquake Authority not getting its
rate application approved hasn't helped the situation. We had 2.4 million
insured in 1994 and that has dropped to somewhere around 1.3 million in 1998. 

Lo and behold, the seismic retrofit industry is now as hot as ever!! A recent
ABAG survey still underway suggests an average resid. retrofit cost of $4200
for the City of Alameda. Granted our real estate market has heated up too so
more homes are again being sold at higher prices and there is more money at
the time of sale to spend on retrofits. 

Curiously, I've not heard of similar effects in the commercial insurance
market. Rumor has it that commercial insurance is still underpriced and a
bargain in Ca. There seems to be a lot of new building design and construction
underway. What's the retrofit activity in big buildings like compared to a few
years ago? What's it like in NZ? I would like to hear your anecdotal
information about recent changes in the (Probable Max. Loss) PML policies and
insurance in engineered buildings. What's happening out there? 

Fred Turner
Staff Structural Engineer
Ca. Seismic Safety Commission
1900 K St. #100 Sacramento, CA 95814
916-327-1606 916-322-9476 Fax