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Home Insurance
About Earthquake Insurance
Earthquake Insurance as the name suggests, is insurance that compensates for losses occurring in the event of an earthquake. Many people neglect to apply for this insurance type, thinking they do not require it or that their existing policy covers for it. Neither of this is true!
Earthquake insurance is of primary importance if you live in an earthquake prone area. It should be opted for separately, since it is not part of the standard home insurance coverage. One aspect to keep in mind when taking out earthquake insurance is that since it is catastrophe insurance it will definitely cost more. Usually insurance companies charge about 10 to 25 percent of the structure’s policy limit as the deductible on the policy. Furthermore, in recent times, insurance companies are seen to raise their deductibles.
Though earthquake insurance coverage varies from company to company, generally an earthquake insurance policy will provide converge for the following:
- Damages or losses to the home structure
- Damages or losses to your personal property
- Damages or losses to structures attached to your home such as sheds, garages, driveways and so on.
It is very useful in a situation when your entire home is destroyed in the event of an earthquake, so if an earthquake happens and you had to completely rebuild it, you can make a successful claim and have your home rebuilt. However, if your home was merely damaged as a result of the earthquake, you can make a claim based on your coverage, but the amount you had paid up for this insurance will be more than the compensation you get for mere damages.
Rates depend on location and the probability of an earthquake. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick.
If you live in an earthquake prone area, you need to consider taking up this policy. Sometimes an earthquake may unexpectedly hit your area. However, if you at this time go to an insurance company in your area for insurance you will be turned down because insurance companies do not issue earthquake insurance right after an earthquake has happened. They wait for the after effects of an earthquake to subside before they begin to offer the insurance again.
The deductible you pay is about 10 to 25 percent of the structure’s policy limit and it has been noticed recently that insurance companies are raising their deductibles.
Insurance companies may want to inspect your property before they agree to give you earthquake insurance. You need to know here that some companies have certain requirements.
You may have to bolt you home to its foundation. In addition the insurance company may require you to have strapping guards in place for securing fixtures such as water heaters. You may have to make changes such as the way shelves are mounted on walls.
In some cases, the changes that the insurance company suggests are not very expensive to take on, while at other times you need a contractor to do the work for you. So, you have to decide on whether or not to take up the insurance based on such qualification criteria and the likelihood of risk you face for an earthquake.
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