Home Insurance

Why do you need Earthquake Insurance?

If you live in an area prone to earthquakes, you need to have earthquake insurance. In the United States, San Francisco Bay Area is the one most prone to earthquakes. According to the United States Geological Survey this area has a 70% probability of having an earthquake that measures more than 6.7 on the Richter scale.

Many people simply assume that their home insurance policy would automatically take care of earthquake insurance. This is not so! The standard home insurance policy only offers standard coverage. Earthquake insurance needs to be taken separately.

In the event of an unexpected earthquake, you need funds to help you repair and rebuild your home so that you can live in it as before. Earthquake insurance can provide this for you and without it you would have to face the enormous task of having to spend money for rebuilding your entire home, which can be a really big financial drain.

Earthquake insurance provides you coverage for structural damages. This includes damages to the home structure and to additional structures of the home such as a garage or a shed and damages to personal property within the home. It applies differently to a single family home and to a condominium, so policyholders need to check how coverage is applicable in the event of a loss and the exceptions under which coverage will not apply.

Those interested in taking up earthquake insurance have two choices. They can take up a comprehensive policy that offers coverage for everything ranging from home structure to additional structures and personal property. Building code upgrades will be considered at the time of repairing or rebuilding in the event of a loss in a comprehensive coverage. They can also opt for the mini policy, which offers coverage for damages to home structure but offers a limited coverage for damages to additional structures, personal property and building code upgrades.

In California, it is mandatory for insurance companies to offer earthquake insurance as a part of their home insurance coverage. The state legislature has gone so far as to create the CEA to enable earthquake insurance to become more affordable to people in California and to help insurance companies offer such insurance without facing severe losses due to claims. This shows the importance of having earthquake insurance and why as a person living in an earthquake prone area, you need to consider taking it up.

Home Insurance Center

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