After two sizeable earthquakes in less than a week, Californians have had a jarring reminder of their unsettled landscape. But with less than 15 percent of California homeowners purchasing earthquake policies, are their finances on equally shaky ground? With recent changes in bankruptcy laws, walking away after a natural disaster may not be a viable solution for uninsured losses.

“Living in California without earthquake insurance is like going to the beach without sunscreen: You’re completely exposed and you could get burned,” said Candysse Miller, executive director of the Insurance Information Network of California.

Homeowners who decide to forego earthquake insurance nonetheless often take few measures to reduce earthquake losses. Most experts recommend that uninsured homeowners retrofit their home for seismic safety and maintain a savings account in case disaster strikes. While some consumers feel “it won’t happen to them,” others believe that they would receive government relief for disaster losses. However, such a decision could carry serious consequences.

Federal aid is not available for all disasters and even then, it is available as low-interest loans that must be paid back.

Homeowners who plan to “walk away” from damaged property may find that new bankruptcy laws leave them in a deeper financial hole than they had expected.

Many homeowners make the decision to purchase earthquake insurance based on the equity they have in their homes. However, with California’s hot real estate market, homeowners may underestimate their equity. The contents of the home may also get overlooked. Many homes today have expensive electronics, furniture and collectibles that need to be inventoried in the event that they are stolen or destroyed.

IINC offers the following tips to homeowners on preparing financially for an earthquake:

• Evaluate your finances. Take another look at the equity you have in your home and inventory your property. It may be more than you realize, and you may decide you want to protect your investment.
• Retrofit your home. In some cases, taking simple steps such as bolting wood-frame homes to the foundation could dramatically cut the risk of earthquake damage and even reduce earthquake insurance premiums. Smaller steps such as strapping your water heater to the wall, bracing large appliances and bookshelves, and using museum cement to secure fragile collectibles can also save you money and headaches.
• Shop around for insurance. There is a competitive market for earthquake insurance in California. Both the California Earthquake Authority and private insurers offer policies, allowing consumers to compare options and prices. Several companies also offer supplemental policies to increase contents coverage or lower insurance deductibles. Talk to you insurance agent for more information.

Additional information and links to other resources about earthquake insurance and seismic safety are available at the IINC website at www.iinc.org.