Earthquake Insurance

Earthquakes; they come with little to no warning and cause billions of dollars in property damage. There are areas of the country that are known for earthquake activity such as :

 

• Alaska
• California
• Hawaii
• Nevada
• Washington
• Idaho
• Wyoming
• Montana
• Utah
• Oregon

It’s important to note that an earthquake centered in one state may produce damage in another. They can be deadly, they can hurt people, and they can destroy your home in an instant.

Surprisingly, even in the top 10 states listed above, only about one in ten homeowners elect to purchase earthquake insurance. This represents a decline of about 50% from a year ago. Most people when asked, attribute their reason for not purchasing this valuable coverage is the cost, and they feel like FEMA will bail them out if the worst should happen.

Earthquake insurance covers repairs or replacement of your home and other structures as a result of an earthquake. It will also help to pay additional expenses to meet current building codes and stabilize the land under your dwelling. It will pay for debris removal and extra living expenses you might incur while your home is under repair or being rebuilt. Earthquake insurance does not cover damaged land due to sinkholes from erosion or other hidden openings under your land. The earthquake policy does not cover anything that another policy should cover such as damaged autos, external water damage or flood damage. Many of the policies being offered currently have low on contents coverage and sub-limits on certain items like computers and televisions.

Your purchase decision is fairly easy when it comes to earthquake insurance. How much would it cost to replace your home minus how much you can pay out of pocket? Add to that the cost of replacing your contents and you arrive at the amount of coverage you need. For many people, the cost of earthquake insurance is prohibitive, but it’s better to have some than none at all. Therefore, you should purchase as much earthquake insurance as you can afford up to the 100% replacement cost of your home, other structures and contents.

It’s reasonable to assume that as insurers experience favorable loss results year over year, the cost of insurance should come down, and more homeowners will purchase this valuable coverage. If you are considering purchasing a new policy or shopping the policy you have, contact us so an experienced agent can help you determine the best policy with the best value.