Dear Liz: I have earthquake insurance through the California Earthquake Authority that costs $42 a month for my home and $72 a month for a duplex I own. The policies have a 15% deductible. Is the coverage worth it or am I wasting my money?

Answer: Do you have the cash on hand to rebuild your properties if they’re destroyed in an earthquake? If not, would you be comfortable walking away from the properties, including any equity you have in them and any mortgages you owe on them?

If the answer to these questions is no, then buying earthquake insurance is a prudent move. The deductibles are substantial, but the point is to protect you from the catastrophic expense of rebuilding.

You can probably get somewhat lower deductibles, by the way, if you’re willing to pay higher premiums. The CEA has a 10% deductible, as do a few private insurers that offer coverage.

Either way, you should try to keep a cash reserve equal to the deductible, or at least have access to an adequate line of credit established in advance. Once the Big One hits, you won’t be able to get a home equity line on your rubble.

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