What Earthquake Insurance Covers

When an earthquake occurs, the sudden and violent shaking of the ground as the Earth's crust moves can cause a lot of damage. Earthquake insurance assists homeowner’s if this damage occurs to their home. Earthquake insurance is available to cover the structure of your home, the personal belongings within your home, and loss of use expenses. Loss of use expenses coverage helps pay for the costs associated with living in another place while an evacuation related to earthquakes occurs, or while a person's home is repaired because of damage caused by an earthquake.

Standard insurance plans do not cover damage from earthquakes; the insurance must be purchased separately in the form of an insurance rider. It can also be purchased as individual insurance. If you live in a high-risk area for earthquakes, adding an endorsement to your existing homeowner's insurance policy or buying a separate policy is a good plan.

Earthquakes do not appear in the news often, but around 200,000 of them occur every year, with the majority of them happening in states that are considered at risk of earthquakes, 42 total according to the US Geological Survey. The majority of earthquakes are not very noticeable, being too small to cause much damage. Earthquakes can also create catastrophic amounts of damage. As with any force of nature, the risks in some areas are higher than others. One of the most significant variables pertaining to the cost of earthquake insurance is location, and this is due to the various risk each place has when it comes to earthquakes.

If you sustain a loss of residence because of an earthquake, an earthquake insurance policy will pay for reasonable expenses that you sustain. Your dwelling, personal property, and additional living expenses are all parts of your earthquake insurance coverage.

Dwelling insurance for earthquakes helps cover the costs of damage such as cracks in walls, damage to your home's foundation, damage to your ceiling, and other damages as well. This portion of your earthquake insurance policy has both a limit and deductible. A limit is the most your insurance company will pay when a claim is made. The deductible is your out-of-pocket expense before your insurance provider pays out on claims.

Personal property insurance for earthquakes includes things like furniture, electronics, and other belongings. Most anything can fall within this category, but there is also a deductible and limit to this portion of insurance coverage. The limit and deductible for personal property insurance for earthquakes are separate from the limit and deductible for dwelling coverage.

Additional living expenses coverage can help pay for a rental home, apartment, meals, temporary telephone expenses, moving expenses, storage, furniture rental, and many other things while your home is being repaired or you have been evacuated from it.

There are some things that earthquake insurance does not cover that could be related to an earthquake. Things like fire damage when an earthquake causes the fire. This would fall under the standard homeowner's insurance policy that the property owner has. Keep in mind, land itself is generally not covered under this policy, although some plans do include engineering cost options.

How Earthquake Insurance And Claims Work

The premiums and deductibles available for earthquake insurance can vary quite a bit. Most often, earthquake insurance provides the same limits for dwelling coverage as your standard homeowner's insurance policy. For earthquake insurance, the deductible is usually a percent of that limit.

To file an earthquake insurance claim, the owner of the policy needs to call their insurance company and inform them of the earthquake and what the visible damages are that were caused by it. It can be hard at times to evaluate the damage from a shock, especially when there is no visible damage to be seen. In some cases, especially for older homes, having your home inspected after an earthquake to help determine where the damage is and how much of it there is can be a good plan.

Determining If Earthquake Insurance Is Worth It

While most homeowner’s insurance policies do not cover earthquake damage, people that are considering purchasing it should look at their plan and confirm that earthquakes are not included on it. If it is already on your policy, you may not need to purchase more. Additionally, if you live in a high-risk area for earthquakes, earthquake insurance can be extremely valuable to have. People on the West Coast of the United States, and Hawaii, in southern Alaska, and various other places in the United States tend to have a higher risk when it comes to damage from earthquakes.

Earthquakes tend to be extremely unpredictable, and people do not know how powerful they will be or when they will strike. If you cannot afford the cost of rebuilding or repairing your home if damaged by an earthquake, you may want to consider earthquake insurance.

If you cannot afford to replace the personal belongings in your home after an earthquake, you may want to consider earthquake insurance.

If you cannot afford temporary housing if your home is no longer habitable, either due to evacuation or structural damage, you may want to consider earthquake insurance.

The Factors Affecting The Cost Of Earthquake Insurance

The most significant factor affecting the cost of earthquake insurance is location. Locations that are at higher risk generally cost more. The risk level where you are is not the only thing that affects your insurance premiums, however. The number of stories your home has, including the basement, as well as the age of your home can also affect premiums. If you own a newer home, odds are it is built out of better material, and it may even be designed with earthquakes in mind. These are two of the reasons that newer homes generally have lower premiums than older homes.

The material your home is made from is also relevant to insurance companies. Houses with wooden frames are often less costly to insure because the material has more elasticity. The foundation of your home can also impact insurance costs.

Homes can be retrofitted for earthquakes, which is another way that homeowners can save on earthquake insurance. Retrofitting can include things like bolting a home to its foundation, adding braces to chimneys and water heaters, and installing cutoff valves to stop gas flow automatically if an earthquake occurs. Also, strengthening walls can help improve costs.

Final notes

In many areas of the country, earthquake insurance is essential. Make sure potential damage to your home is covered, and look to get the right amount of protection at the right deductible. By focusing on getting enough coverage, and the coverage that you need, your home will be much safer, as will your finances.