Just 13 days before the Aug. 24, 2014 earthquake struck Napa, Lorraine and Bret Marquis had finally moved into their Main Street home. The couple had spent more than three years restoring it, doing much of the work themselves after work and on weekends.
And then the quake hit, severely shaking the hundred-year-old house, damaging the foundation and interior.
Upon hearing the news of the quake – the couple was in Cabo San Lucas on vacation – the Marquis’ returned to Napa to survey the damage.
It wasn’t a pretty sight.
The plaster interior walls were wrecked. “Pretty much anything on a wall was no longer there,” Lorraine Marquis said. Her kitchen was a shambles.
More significantly, “We could tell the front northeast corner of the house was significantly lower than the rest of the house,” she said.
“And I thought, ‘Well gosh, thank goodness we have earthquake insurance. This will all get fixed.”
Unfortunately, their recovery hasn’t been all that they hoped it would be.
After calling their State Farm insurance office, adjusters and agents came to see the damage at the home. State Farm sells and services the earthquake insurance policy, but the California Earthquake Authority (CEA) provides the insurance coverage.
Their earthquake insurance policy featured an estimated $46,000 deductible and a limit of $385,000. Many measurements and photos were taken, she said. The couple felt optimistic. Things were moving along.
“We thought, ‘This is good.”
The damage seemed obvious, she said. “We were thinking we were going to get a new foundation.”
After State Farm reviewed the evidence, the couple was informed that the house has sunk some four and a half inches. Even worse, the CEA denied their claim because it said that the foundation damage was not due to the earthquake itself.
“They said (the damage) was caused by settlement” before the earthquake, said Marquis.
Representatives from both the CEA and State Farm declined to comment on this specific case.
The CEA reportedly approved a claim payment of about $20,000 for the couple to fix their interior walls.
Lorraine and her husband were dismayed and confused.
Just weeks before the quake, the couple had planned a kitchen remodel. Engineers who reviewed the home at that time told the Marquis’ that their house has sunk by about one and a half inches. It seemed obvious that the quake had caused the home to sink even more.
Not only that, but a claim payment of $20,000 would barely cover the cost to replaster just a single room.
More engineers visited. More reports were created. Months went by. Finally, the CEA authorized a different claim payment amount.
“They said, ‘We’re not paying for your foundation,” but the CEA agreed to pay a total of $83,000 for interior repairs, said Lorraine Marquis.
Minus their $46,000 deductible, the couple would get a check for about $37,000.
They also got a payment of about $20,000 for moving expenses, code upgrades and hotel expenses.
Lorraine Marquis said this was not what she expected from her earthquake insurance coverage.
“I have earthquake insurance,” she said. “They took my money for three years and if they didn’t think it was insurable they shouldn’t have taken my money.”
Marquis said she didn’t expect the insurance company to pay for everything, but she thought it could have paid to replace the foundation and fix the walls. That would have been close to but under their coverage limit of $385,000, she estimated.
But after almost 18 months of back and forth, she had reached her limit.
“They wear you down” with paperwork, phone calls and meetings, she said. The couple each works from home – Lorraine in the tech industry and Bret in the equipment manufacturing business.
“It affected my work, everything.”
“I lost a lot of my will” to continue fighting, she said.
Lorraine Marquis said she and her husband asked themselves, “Do we just want to just move on and start fixing our house or go into a protracted battle?”
“It was a really hard decision,” but they decided to move on and cashed the check for $37,000.
In the months afterwards, the Marquis’ spent more than $300,000 of their own money to fix up the house from quake damage — more than what they paid for it, she said. The money came from savings and a home equity line of credit, she said.
“We were fortunate (to have those resources), but any kind of early retirement is gone now,” she said.
Notably, they no longer have earthquake insurance.
The first year after the quake, their rates doubled, she said. After that, the couple decided to drop the coverage.
“If they didn’t pay out then, when were they ever going to pay out?” she said. “Why would I just give them more money?”
The house, now rebuilt, is quite strong, she said. It would take an even stronger catastrophic quake to severely damage the house today. And if the area has a catastrophic earthquake, insurance will be the least of her problems, she said.
In addition, for what the home is worth now, any insurance deductible would likely be more than $100,000, she said. The premium would be more than $5,000 a year, she predicted. In 10 years, that’s $150,000 in premiums alone, she said. “And a chance I wouldn’t get paid? The math just doesn’t work.”
Chris Nance, the CEA’s chief communications officer, said he couldn’t discuss specific cases like the Marquis.
However, “We absolutely believe people should have some sort of earthquake protection for their homes and not leave that to chance,” said Nance.
“Scientists are telling us that wherever you live in California, you are vulnerable to shaking,” he said.
“There is responsibility for the policyholder to make sure they understand” their policy and how it works, Nance said. However, “We recognize that there is misunderstanding out there how the CEA policy works.”
For example, “The deducible is often the most misunderstood choice that people can make with a policy.”
Based on feedback from consumers, “We’ve made changes,” said Nance. Specifically, “People are telling us they want to have more choices available to enable them to be in control of the coverage they select.”
Therefore, the CEA now offers more choices in deductibles, which can help make a policy more affordable, Nance said.
Prior to the Napa earthquake, 10 percent and 15 percent were the only choices for deductibles, said Nance.
“We’ve listened carefully and increased limits. Coverage choices and deductible options are vastly different as of 2016.”
After more than a year of dealing with insurance companies, Marquis had this advice for anyone with earthquake insurance, or any other kind of insurance:
“Document everything,” she said. “Document every single thing you have and have done. Take pictures of every single inch of your home, because they will nitpick you down.”
Today, Marquis is happy they moved forward.
The emotional toll was too much, she said, “and I don’t have that anymore. I’m still bitter, but I have a right to be.”
These days “I feel really good when I’m in my house.”
After everything that happened, she finally got her new kitchen, said Marquis. “That’s the bright point that makes me happy.”