Be Informed on Earthquake Insurance
Most damage resulting from an earthquake is not covered by a standard homeowner’s insurance policy. This is why good earthquake insurance is so invaluable. It is a highly specialized form of policy protection that homeowners can buy to protect them from property loss or other damage that is due to seismic activity. As certain regions are more prone to earthquakes than others, coverage is often not available in some parts of the country. The cost of this coverage’s premium payment is determined directly by where the insured property is located and how often seismic activity happens there. Earthquake coverage can frequently be added onto one’s current property insurance policy or it can be bought separately. This coverage is also available for renters to buy.
What is Covered?
Earthquake insurance will generally offer three different types of protection:
The insured main property and potentially other structures
The personal property within one’s insured home
Consequential living costs that might be incurred if one is unable to live in a damaged structure.
Earthquake policies will usually have separate deductibles for the home and personal property aspects of the coverage. Depending on the insurance company, there might be an additional deductible for the living expenses coverage.
Earthquake insurance is usually provided based on a home’s actual value. For example, a $500,000 home can be protected up to its full value with the necessary deductible being between 10 and 20 percent of that amount. For instance, if the claim is for the full $500,000 for earthquake damage with the 20 percent deductible, the homeowner will need to come up with $100,000, with the earthquake insurer paying the remaining balance of $400,000.
Wood frame homes will more often get through an earthquake better than would a brick home. If one sees visible damage to the home after a seismic event, he or she should contact the insurer immediately. Even should there be no visible damage, it is a good idea to have the home inspected to be sure all remains intact.
Those who live in a quake-prone region, such as certain parts of California, can obtain this insurance from several insurance providers. Conversely, living in areas that are relatively free of seismic activity will probably mean one will not need coverage. Living on the west coast, Hawaii or other active areas are where insurance is important to obtain. Keep in mind that no one knows when a quake might happen.