Earthquake Insurance

California is considered earthquake country and for good reason. However, it is important to keep in mind that earthquakes can also occur in many parts of the country, some quite large, as exemplified in 2011 when Washington D.C. residents got a pretty powerful wake-up call of a temblor. As nobody can possibly predict where and when the next seismic event will occur, property owners can at least be prepared and ensured of peace of mind by acting now and obtaining earthquake insurance.

Earthquake coverage is a form of property insurance that is usually sold separately and available to homeowners individually or in group-form; it also available to condominium owners. Apartment building owners who want to insure their properties apply for commercial policies. The cost and parameters of the coverage is dependent upon a number of elements. A lower cost policy will generally only cover any direct damage to the structure of a home caused by a quake and will often have a larger deductible, which is what the property owner will have to first pay before coverage kicks in. For example, an owner with a deductible of say 10 percent would end up paying the first $20,000 to rebuild a damaged home valued at $200,000. Keep in mind that a more basic policy may not pay for damage to the garage or to other buildings on the property or, by the way, to interior furnishings.

In order to cover damage to things such as pools, patios and to furniture, clothing, vehicles and a myriad of other things damaged or destroyed in an earthquake, a more elaborate policy is necessary. Policies can also include coverage for indirect earthquake damage. This includes temblor caused fires, and help with the living expenses of those left homeless as a result of the quake.

In addition to the level of the coverage, the property’s location plays a large role in determining the cost of the policy. Areas of high seismic activity will obviously have higher premiums for policy holders. But also the soil on which a property sits and what the covered building is constructed of all are factors in the determination of premium cost. For example, homes with wooden frames are considered more resilient than those made of brick and are therefore less costly to insure.

Earthquake insurance will help homeowners avoid the hassle and fear of needing government programs in the event of a disaster. Get all the facts from one of our agents before considering purchasing such coverage.