Should You Get Earthquake Insurance?
Just about everybody who owns a home has homeowners insurance, and knows that it doesn’t cover losses from earthquakes. If the federal government does help you out with some type of disaster relief to rebuild, you’re still going to have to pay that money back. Then you’ll have two very large loans on your home.
The Cost of Coverage
The three major factors that are considered in the cost of earthquake insurance are where your home is located, what it’s made out of and its age. Homes that have a closer proximity to fault lines will carry a higher premium. Older homes are considered to be more likely to be damaged in an earthquake. Also, brick homes are likely to be more costly to insure.
The Deductible Issue
A deductible is a sum that an insured person pays when a claim is made for a covered loss under their policy. The insurance company then covers the balance of the loss up to the insured person’s policy limits. For most homeowners, the biggest obstacle in the way of buying earthquake insurance is the cost of that deductible. And, contrary to popular belief, the percentage of the deductible is not based on the value of the home. The percentage is rather chosen by the insured, in increments of either 5%, 10% or 15% of coverage values for the dwelling, personal property, etc.
What Earthquake Insurance Will Cover
The purpose of earthquake insurance is to repair or rebuild your property if it is damaged. Some of the personal items within the home may be covered, but the policy won’t cover all items. Should your home need major repairs, expenses for alternate living arrangements (such as a hotel or rental unit) may also be covered depending on the policy you choose. Also, it is generally pretty standard that any damage to vehicles or the actual land that the property sits on will not be covered by earthquake insurance.
If you are still wondering whether or not you should purchase earthquake insurance, feel free to contact us. We can answer any questions you may have and provide you with a free quote. Call us at 866.822.7755.