Woman buys quake insurance, company cancels it

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Earthquakes are part of life in California - a series of small quakes rattled the state over the past few months - and yet, only 17 percent of us have earthquake insurance. (KGO-TV)

Earthquakes are part of life in California - a series of small quakes rattled the state over the past few months - and yet, only 17 percent of us have earthquake insurance.

"I thought oh, maybe I'm pressing my luck,'' Lynn Olivar of San Bruno began to think.

She felt uneasy from watching a spate of natural disasters -- hurricanes, wildfires, a quake in Mexico. It seemed foolish not to have earthquake insurance in earthquake country, so for the first time, she bought some.

"It'll cover your structure, it'll cover your stay somewhere while you are rebuilding," she says

Olivar felt more secure with her new policy - that is, until she got a notice from her quake insurance carrier, California State Automobile Association.

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"It said my policy will be canceled if my payment is not received," Olivar recalls.

She contacted the carrier immediately: "I said, 'what are you talking about, I did pay.'''

And she had proof. Her credit card statement shows a $232 payment to California Earthquake Insurance - posted well before the due date.

"So the guy said, 'we've been changing our system it's probably a mistake, you have a confirmation number, you're fine don't worry about it.' So, OK," said Olivar.
But it wasn't OK. Three weeks later she received another notice, this one saying her quake insurance was now officially canceled.

"So of course I flip out and I called them again," she said.

And again, Olivar pointed out that she did pay, offering to send copies of her credit card statement, her renewal confirmation, and her bank statements.

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"They told me why don't I call VISA and ask where the money went," she recalls. "I couldn't believe it. I said, it went to you guys."

Not only that, CSAA told her she was considered delinquent, so even if she paid again, underwriters would not reinstate her policy.

Olivar was frustrated with the system but worse, feared a quake would hit right when she had no coverage.

"Oh my God, with my luck, watch it be a big one."

Sure enough, one day, a big scare.

RELATED: Bay Area Earthquake Tracker

"The bird was freaking out,'' she said. Her pet cockatiel began squawking wildly.

"And ten seconds later, the house began to shake,'' Olivar recalled. "You know, animals they can sense these things before they happen."

She worries a huge tree behind her property may fall on her house in a quake. "It could have been some big damage,'' she said.

Luckily there was no damage, but Olivar wanted her policy back. "That's when I called 7 On Your Side." ABC7 contacted her insurance company, pointing out that Olivar had paid her premium.

Soon after, Olivar got a call from CSAA.

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"She said, 'oh, we've located your funds and you are reinstated,''' she recalls.

The company tells 7 On Your Side: "We apologize for the miscommunication, have addressed the customer's coverage concern and are looking into our processes to better understand how to prevent this from happening in the future. " CSAA said it also provided her a free one-year AAA membership

CSAA told Lynn it had mistakenly applied her payment to her regular homeowners' insurance. And says she would have been covered had anything happened during that gap. Now Olivar's ready for the big one.

"Thanks to 7 On Your Side,'' she said. "You guys are great."

Written and produced by Renee Koury
Related Topics:
earthquakeinsurance7 On Your Sideconsumer concernsconsumerhome repairsprepare norcalSan Bruno
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