Are You Prepared To Weather A Disaster?

Even though his $600,000 home was two blocks from the earthquake epicenter in Northridge, Calif., and has been declared unsafe, Mike Kessler considers himself lucky. The steel executive purchased earthquake insurance in 1991 after remodeling the house. At the time, it seemed like a big nut to carry: The annual premium is $1,300, and Kessler must pay the first 10% of damages. But now his insurer, Farmers Insurance Group, may pick up more than $400,000 in repairs. "If we didn't have insurance," says Kessler, "we'd have to walk away from the house."

To continue reading this article you must be a Bloomberg Professional Service Subscriber.