Should I Buy Earthquake Insurance
The questions below can help you decide whether or not to buy earthquake insurance for you and your family.
Can I afford earthquake insurance?
Use the Premium Calculator at www.earthquakeauthority.com to estimate your premium.
Do I live where earthquakes are common?
You may need to do some research about nearby fault lines and the type of soil in your area. Search for fault lines on the U.S. Geological Survey website at .
Do I have a high-risk house?
A house is likely to have more damage if it is older, or built of brick or masonry, or has more than one story.
Can I afford NOT to have earthquake insurance?
After a big earthquake, could you afford to repair or rebuild your home? Can you afford to keep paying your mortgage and taxes while you rebuild?
Won’t the government help me after a big earthquake?
Maybe. The main form of federal disaster relief is the low-interest loan. You must show that you can repay the loan. Grants from the Federal Emergency Management Agency for emergency home repairs and temporary rent assistance are only for those who do not qualify for loans.
I can’t afford earthquake insurance. Are there other ways I can protect my home?
Yes. There are many things you can do to protect your home and reduce the damage caused by earthquakes. Whether you buy earthquake insurance or not, you should do what you can to protect your home, your belongings, and your family.
Do not wait until after the earthquake.
Does Home Insurance Cover Damage From Renovations
A lot of homeowners dont realize they need to take out a specific renovation policy if theyre doing major work, even if the contractor has a builders risk policy.
According to Trent, the builders risk policy covers only new construction, not the existing structure.
Its OK if youre just doing cosmetic updates but if youre taking the roof off, thats more than a standard homeowners policy is designed to protect, she says.
Even if the house is a tear-down, a renovation policy will cover any liability issues for people who wander onto the property and get hurt.
If someone gets hurt on the property, youre liable, she explains. If neighborhood kids are playing around in the empty house, thats your liability.
Know Your Insurance Policy
Homeowners insurance protects you financially against covered damages to your home and personal belongings. In some instances, home insurance can also protect you from financial liability for injuries to others that occur in your home, as well as additional living expenses should you need to temporarily relocate after damage. There are several policy types offered for home insurance. No policy covers all natural disasters, and some have more restrictions than others.
It is important to understand which policy type you have and what natural disasters your homeowners insurance policy covers. All policy types can have exclusions, especially if you live in an area prone to certain kinds of natural disasters, so you may want to discuss your policy with your provider to see what is excluded from your policy and if you need to purchase additional coverage.
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I Have Homeowners Insurance How Can I Get Earthquake Insurance
If you have homeowners insurance in California, your company must offer to sell you earthquake insurance. It must offer this every other year.
- The offer must be in writing. It must tell you the amounts it covers , the deductible, and the premium.
- You have 30 days to accept the offer. The 30-day period starts the date the company mails the offer to you. If you do not reply, you are rejecting the offer.
Do I Need Earthquake Insurance
The U.S. Geological Survey says you should consider these factors when deciding whether purchasing earthquake insurance makes sense for you:
- Proximity to active faults
- The value of your home and its contents
- The cost to insure the home
That might seem like a lot of things to think about, but it really boils down to three simple questions:
- How likely is it that an earthquake will happen?
- How likely is it that an earthquake would cause damage to your home?
- Would you be able to afford to repair your home after an earthquake without the help of insurance?
That last question is an important one. Though the vast majority of the 55 earthquakes per day that occur around the world cause no or little damage, it only takes on big one to cause catastrophic damage to your home.
To better understand how often damaging earthquakes occur in your area, check out this map from USGS.
While earthquake insurance can be great to have if your home is seriously damaged and the damage exceeds your deductible, the high premiums and deductibles that come with earthquake coverage can make the balance between what you pay and what you get uneven.
In fact, according to the Federal Emergency Management Agency , most potential earthquake insurance buyers are not likely to experience damage that would exceed their deductibles.
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Where Can I Buy Earthquake Insurance
There are dozens of insurers that offer earthquake insurance as an add-on on their standard homeowners policies. If youre interested in adding coverage to your policy, ask your insurance company if they offer Earthquake Insurance in your state, and how much it will add to your monthly premiums.
At Lemonade, we offer Earthquake Insurance for our California homeowners insurance policyholders through our partners, Palomar, for just a few extra bucks a month. This add-on extends coverage for your stuff for any physical damage by an earthquake event.
Its worth noting that a base policy Lemonade already covers direct loss caused by fire, explosion, or theft resulting from earthquakes.
Find Cheap Homeowners Insurance Quotes In Your Area
Earthquake insurance covers damage to your home, personal belongings and additional living expenses if you need to temporarily live somewhere else after an earthquake. Standard homeowners and renters insurance policies typically don’t include earthquake coverage, but you may add it to an existing homeowners insurance policy as an endorsement or purchase it as a separate policy.
Earthquakes happen when a movement in the earth’s crust causes sudden, violent shaking in the ground. Roughly 200,000 earthquakes occur each year, and they’re typically concentrated in 42 states, according to the U.S. Geological Survey. Most earthquakes are small and cause little or no damage, but others can be catastrophic.
Depending on where you live, it might be a good idea to purchase this type of coverage.
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What Is An Earthquake Deductible For Home Insurance And How Does It Work
Regardless of whether your earthquake coverage is an endorsement or an entirely different policy, a separate earthquake deductible will apply. Instead of a set dollar amount, an earthquake deductible is usually set between 2% and 20% of your dwelling coverage. The percentage you will pay is usually determined by your proximity to a fault line or area of active seismic activity.
As an example, if your dwelling limit is $200,000 and you have a 5% deductible, you can expect to have $10,000 deducted from your home insurance payout.
Are You Really At Risk Of An Earthquake
The first thing you need to learn when you’re thinking about purchasing earthquake insurance is the real risks of where you live. The U.S. Geological Survey has the information you need to find out.
According to the U.S. Geological Survey, the U.S. has about 20,000 earthquakes a year. Most people don’t realize that they might live in a zone that could be affected by an earthquake. Out of 50 states, 42 are at-risk.
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What Does Home Insurance Cover
This is where you really need to read your contract because your home insurance only covers whats outlined in it, or named perils, unless you purchase comprehensive home insurance. It wont cover everything that can happen to you and your home, nor is it meant to help with the day-to-day home maintenance. Home insurance is there to help with sudden, unpredictable events. Plus, it depends on the type of home insurance you purchase. For more on whats covered by home insurance, read the full article here.
Does Having A Fireplace Increase The Cost Of Home Insurance
Fireplaces and firepits are warm, cozy and can increase your home insurance premiums. Its estimated that a wood-burning fireplace can increase premiums by $100 a year. Having a fire pit could increase certain risks like property damage. Then theres the added value to your home with a firepit. Your premiums may increase due to that.
What Does Earthquake Insurance Commonly Cover
Earthquake insurance covers repairs needed because of earthquake damage like shaking and cracking to your dwelling and may cover other structures not attached to your house, like a garage. It insures your personal property for damage caused by earthquake. It may cover increased costs to stabilize the land under your home. Earthquake insurance covers the cost to remove debris. It also pays for additional living expenses you may have while your home is being rebuilt or repaired.
What Personal Property Coverage Will Not Cover
High-value items are generally not covered under the basic homeowners personal property package or at least, not entirely. Most companies provide limited coverage for these, usually up to $1,000 or $2,000 per item. This includes things such as:
If you own these types of valuables, youll need to have them professionally appraised and add a personal property endorsement or rider that covers their full value.
Rates can vary between providers, but you should expect to pay about 1% to 2% of the value of your item. For example, a $5,000 engagement ring would likely cost about $50 per year to insure.
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How Much Does Earthquake Insurance Cost
The closer you are to a fault line, the more quake coverage costs.
An 12-month earthquake policy can cost as little as $300 and as much as $5,000. But like the price calculation of any standard homeowners insurance policy, the calculation of an earthquake policy’s premium takes many factors into consideration:
- The amount of coverage you purchase
- The amount of your deductible
- The age, location and type of house
- The likelihood of an earthquake damaging your house
- The cost to rebuild your house
A 12-month earthquake insurance policy can vary in price due to the above factors and others, such as the time frame of your area’s last quake, your area’s annual rainfall as well as the composition and slope of your property. Californians pay a lot for earthquake insurance due to two major factors: The Golden State has the most quakes and houses are expensive relative to the rest of the country.
What To Do If You Experience Earthquake Damage
After experiencing a disaster, Wilson recommends staying in touch with your homeowners insurance company to let them know what’s going on at your home and take the following steps when submitting insurance claims:
Customer service is key for homeowners in disaster-prone areas. Homeowners need to understand the risks and have good coverage with an up-to-date policy.
Is your homeowners insurance provider communicating with you about how to evacuate and file claims when a disaster is coming? Is your provider transparent about your coverage? Is your insurance company proactively reaching out to assist you? If not, consider changing your homeowners insurance company.
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Types Of Home Insurance Policies
After your insurance company has assessed the value of your property, you’ll need to determine what type of policy best suits your needs.
The type of insurance policy you have will determine which risks youre protected against.
Generally, the main types of home insurance policies include:
What Does Earthquake Insurance Cover
An earthquake policy typically covers three areas of risk associated with earthquakes:
- Damage to your dwelling’s original structure
- Damage to your personal property
- Additional living expenses you need if your house becomes uninhabitable.
You’ll notice that a standard homeowners policy also covers those same three areas, but a standard homeowners policy does not recognize an earthquake as a named peril.
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Know Your Options When It Comes To Earthquake Coverage
Earthquakes are scary! Making sure you know what you are covered for doesnt have to be, feel free to reach out to ALLCHOICE if you have any questions about insurance for your Homeowners Insurance.
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What Does Your Homeowners Policy Cover
Most residential property insurance policies do not cover damage resulting from earthquakes. A separate insurance policy is one way to protect your home and the investments you have made in personal belongings. Investigate your options carefully to ensure that your assets are sufficiently protected.
Does Home And Car Insurance Cover Earthquakes
Earthquakes arenât all that common in Australia, which is why many were shocked when a quake hit Victoria on Wednesday. The small town Mansfield was at the epicentre of the earthquake and the highest magnitude recorded was 5.9 at 9.15am.
So far there have been no reported serious injuries, but there has been building damage. If you havenât experienced an earthquake before, right now you might be wondering whether itâs possible to claim repairs with your car or home insurance.
Hereâs the lowdown on insurance and earthquakes.
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Where Can I Get Earthquake Insurance
Not every insurance company provides earthquake home insurance because of its risk and high payout. Even among the insurers who do, there may be a wide range in policies and costs. A good place to start your research is with your own bank. This will give you a baseline against which to compare other policies and, if youre satisfied with it, you can enjoy the ease of keeping your products and services consolidated.
The decision of whether to get earthquake insurance is a personal one, but there are guidelines to help make your decision easier and better informed. Let your location, the likelihood of an earthquake in your geographical region, the value of your home and contents, and your personal comfort guide you.
Earthquakes Mudslides And Sinkholes
If you live in an earthquake-prone area, consider buying earthquake insurance and sinkhole insurance coverage. Standard homeowners and renters insurance policies don’t cover earthquakes, mudslides and sinkholes. These disasters can significantly damage the structure of a home’s foundation, walls, furniture and belongings.
In the Golden State, the California Earthquake Authority offers earthquake coverage to residents.
Although standard homeowners insurance policies don’t cover earthquake damage, they may cover electrical fires caused by earthquakes.
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Assess Your Level Of Risk
Consider your homes level of risk for different types of unexpected events and disasters, for example, wildfires, landslides, floods or earthquakes.
If you live in or near a forested area, you may be at risk for wildfires.
Some parts of the country are at higher risk for flooding, especially flood plains. Even if you dont live near bodies of water like rivers or lakes, you may still be at risk from rain-related flooding.
Some parts of Canada, such as British Columbia, parts of Ontario and Quebec, including the regions near Ottawa, Montreal and Quebec City, and parts of the three territories, have higher earthquake risks for residents. Other areas of Canada also have some earthquake risk.
Landslides can happen across Canada. Mountainous areas in British Columbia, Alberta and the St. Lawrence Lowlands of Quebec and Ontario have a higher risk.
Consider the age of your home. Newer homes may include features that make them more resistant to disasters. Older homes may be at higher risk.
Your insurance agent or broker may be able to help you assess your level of risk.
Does Home Insurance Cover Historically Accurate Repairs
If you live in a landmark area and you need permission from the historical society to make changes to your home, there might be a cap on how much your insurance will pay to fix a problem. And the historical society might dictate the kinds of material you must use on your home, no matter how expensive it is.
A hailstorm decimated all of these historic homes in Dallas recently, says Trent. What should have been a $9,000 vinyl siding repair ended up costing homeowners $90,000, because the historical society insisted they use a specific type of shingle. A typical policy would not have made up that difference.
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