Earthquake Preparedness Series Part 1: Earthquake Insurance (and do I need it?)

While we experience earthquakes quite often in California, many people do not have, or do not know what earthquake insurance is. Today we will cover what earthquake insurance is and whether or not you should look into purchasing it for your insurance package.

What is Earthquake Insurance?

Earthquake insurance is a policy that covers damages caused by earthquakes to your home. Although you may already have home, condo, or renter’s insurance, these policies generally do not cover damage from earthquakes. However, you can easily purchase an additional earthquake policy from places such as the California Earthquake Authority. The California Earthquake Authority is state-run organization that offers earthquake insurance to California residents through participating earthquake insurance companies and educates them about earthquake preparedness and safety.

Small earthquakes may leave only a few toppled objects or crooked picture frames, but larger earthquakes can cause a wide range of damage. Earthquakes can demolish a house, damage its building structure or foundation, or cause fires and flooding.

Earthquake insurance can include a variety of protections. Some earthquake insurance policies will only protect against structural damage caused directly by the earthquake, while others will protect against indirect damage from fires or flooding. Policies can also include coverage for damaged property such as cars or boats, or cover temporary relocation costs while you wait for your home to be repaired. Sometimes, policies do not cover garages or other structures on your property so be sure you know what the policy covers. Consult a qualified insurance agent to discuss your needs before purchasing.

When buying earthquake insurance, it is best to buy based on rebuilding and replacement costs, not based on the market value of your property. Also, be aware of your policy’s procedures for filing claims.

__________________________

Do I Need Earthquake Insurance?

It wouldn’t hurt to consider looking into it, especially if you live in a high-risk area such as near a fault line.

What distinguishes earthquake insurance from other policies is that after a large earthquake hits, everyone in the region is affected and may need help at the same time.

Many people think that the government will provide enough aid to cover damages caused by the disaster, but in reality the aid will most likely be very limited. In addition, federal aid will commonly come in the form of loans that need to be paid back with some interest. Many California residents will be seeking assistance after an earthquake; having earthquake insurance will give you an upper hand in ensuring that you can rebuild your home and recover quickly.

One of the drawbacks is that earthquake insurance can be pricey, as it is not a common type of policy to own. However, it can be worthwhile if your property is in a high-risk area or you have valuable possessions that can be damaged in the event of an earthquake.

Sources: California Earthquake Authority, Earthquake Insurance Basics, Rethinking Your Stance on Earthquake Coverage, Should I Buy Earthquake Insurance?


One Response to “Earthquake Preparedness Series Part 1: Earthquake Insurance (and do I need it?)”

  1. Earthquake Preparedness Series Part 3: Creating an Emergency Kit | J Morey Insurance

    […] far we’ve gone over earthquake insurance and earthquake-proofing your home or office. Another great way to prepare for an earthquake disaster […]