AUDIE CORNISH, HOST:
The earthquakes that struck Southern California last week were the strongest the state had felt in 20 years. They shook buildings off of their foundations, spurred fires and knocked out power. The entire state is vulnerable to earthquakes, but just 13% of homeowners have earthquake insurance. And to explain why and whether last week's quakes are changing that, we're joined by Glenn Pomeroy. He's CEO of the California Earthquake Authority, a nonprofit that sells earthquake insurance plans.
Welcome to the program.
GLENN POMEROY: Thank you very much.
CORNISH: Two-thirds of earthquake damage in the country happens in California, so why do so few Californians have insurance?
POMEROY: Well, that's a good question. Long answer is - but basically, it boils down to, people don't think it's going to happen to them, and they think it costs too much.
CORNISH: Why isn't it a given? Culturally, why do you think homeownership in California - people don't have the sense that, yes, I should also have earthquake insurance?
POMEROY: One thing about earthquakes that make them, I think, particularly dangerous is they don't happen very often, and it's not visibly apparent that it's going to come. And so scientists are out there letting us know what the probabilities are. But you know, it's a little bit out of sight, out of mind.
The last big one we've had was 25 years ago. It's not surprising, really, that people go on about their busy lives. They've got a lot of other things to attend to on a budget that requires them to put their money in various places. Earthquakes are sort of the silent danger that lurks beneath your surface. And every now and then, it comes and strikes, as it did last week two days in a row - two biggest earthquakes California's had in 20 years.
CORNISH: So I want to talk about some of the other reasons why people don't have insurance. The first - you guys have talked about, people don't think it'll happen to them. The other is a concern about cost. But the other, interestingly, is that people feel like maybe the government will step in or that they already have it. Can you talk about those two ideas?
POMEROY: Insurance is complicated. And a lot of people just think that they've got a homeowner's policy, so they think they might be covered for shake damage. But actually, earthquake is specifically excluded from homeowner's policy in California and everywhere else in this country. You need a separate policy.
A lot of people don't realize that, or they might think the government's going to come in, swoop in after a disaster and rebuild everybody's homes and make everything great again. But actually, after a disaster, while there is some government assistance, it's limited. A FEMA grant is limited to emergency repairs, and the maximum is about $33,000. So that's not going to rebuild anybody's home.
CORNISH: There's no government mandate for people in California to buy earthquake insurance like there is, say, for flooding in some areas of the country. What's the history behind that?
POMEROY: Earthquake insurance isn't required anywhere - not here in California or anywhere else. It is in flood insurance if you live in a flood plain, so I don't think it's going to be imposed by government any time soon. That's why we think it's our job to make the voluntary market work as well as we can.
CORNISH: You're giving me the hard pitch here, and not that many people have the insurance. So what do you think the most recent quake will do? Are you seeing more visitors to the website? Are you getting more phone calls?
POMEROY: The first earthquake hit the morning of the Fourth of July. The second one hit the following evening. The second one was a 7.1 earthquake. Our website traffic went through the roof throughout the weekend and continues. We're up tenfold in terms of the number of people that are coming to our website.
It's going to be a while before we figure out how that translates in terms of how many people are actually buying policies. But I'm pretty sure that we're going to sign up a lot more people in July 'cause, really, for many people, they got the wake-up call that they really needed to get.
CORNISH: That's Glenn Pomeroy, CEO of the California Earthquake Authority. He joined us from the studios of Capital Public Radio in Sacramento, Calif. Thank you for explaining it.
POMEROY: Thank you very much. Transcript provided by NPR, Copyright NPR.