Natural disasters are unpredictable, and no one has control over them. Earthquakes are one of the most devastating catastrophes that can strike without any warning. They can lead to significant damage to your home and property, leaving you with financial difficulties. A standard homeowners insurance policy does not cover damage caused by earthquakes. To actually cover your home and belongings from the direct effects of a earthquake, you'll need a separate earthquake insurance policy.
Earthquake insurance can have many options
Most homeowner, condo and rental insurance policies do not cover damage caused by an earthquake, but coverage can be purchased as an endorsement or a separate policy. You may be able to choose to purchase earthquake insurance from the same company that provides your home insurance, or from a specialized earthquake insurance provider.
What does Earthquake insurance cover?
With Earthquake Insurance, you typically will receive protection for damage to your home and property caused by an earthquake up to policy limits. The policy generally will cover various damages, including structural damage, damaged personal property, and additional living expenses if the earthquake makes your home uninhabitable. It is imperative to understand the coverage limitations and exclusions specific to your insurance policy. An earthquake endorsement generally excludes damages or losses from floods and tidal waves – even when caused or compounded by an earthquake. However, if you experience a loss due to a landslide, settlement, mudflow, or the rising, sinking and contracting of earth, your endorsement may cover it if the damage resulted from an earthquake.
There are several options to consider when purchasing earthquake insurance, some include:
Does the policy cover only your home? Are other structures, such as garages, also included?
Will your policy pay for the contents of your home and for additional living expenses if your home is badly damaged or destroyed?
Are there any exclusions or limitations to coverage?
What deductible must you pay before the insurance kicks in?
Earthquake insurance policies typically have a considerable deductible ranging from 10 to 25 percent of the policy's dwelling coverage. Like with most other coverages, you will have to pay a deductible before your coverage kicks in which. For example, if your home is insured for $300,000, and your deductible is 15 percent, approximately $45,000 is your insurance deductible for a loss caused by an earthquake.
Importance of Earthquake Coverage:
Most homeowners believe that earthquake insurance is not necessary because they live in an area that rarely experiences earthquakes. However, natural disasters that cause severe destruction are no longer predictable. Earthquake damage is not limited to excessive seismic activity, and the damage can occur from minor activity as well. The Earthquake Education Center at Charleston Southern University claims there's a 40 to 60 percent chance of a major earthquake somewhere in the eastern United states in the next 20 years. Earthquake insurance can provide peace of mind that should an earthquake occur, you have protection.
How else to help protect yourself if an Earthquake happens:
Make sure your water heater, gas appliances, and other fixtures are fastened securely.
Check that bookcases and furniture are secure and fastened to walls.
Have a family emergency plan that all family members know. Designate a meeting place outside the home where family members can gather once the danger has passed.
Designate a distant relative or friend who can serve as a point of contact and communication for you and your family members if you get separated.
Plan ahead. Keep flashlights, batteries, and candles on hand. Have a portable radio.
Be sure everyone in your house knows how to turn off utilities (electricity, water, and gas).
When shopping for earthquake insurance, ask the company to help you identify possible repairs and other improvements that will make your home safer and minimize damage.