Earthquake Insurance – What You Need to Know

Earthquakes are scary. They are unexpected acts of nature that, at its least, shake people up (pardon the pun) and, at its worst, cause widespread destruction and death. Most buildings that are anywhere near a fault line, whether they are residential or commercial, are usually these days built with this natural phenomenon in mind. There are safeguards in place to ensure that those that are in these buildings will be safe and, at the very least, be able to survive the quake and be able to get out. Nonetheless, it is always a good idea to prepare for disasters like these before they hit and one has to deal with it after the fact.

If you are in an area that is prone to earthquakes it would be prudent for you to look into getting an earthquake insurance, if you have not gotten one yet. There is now a variety of insurance plans being offered.

First off, earthquakes sadly are not covered by regular homeowners insurance. If you are living in an area prone to earthquakes, it may be worth buying earthquake insurance to protect your home and personal belongings from damage. You should check if you live near an active fault line, and if you do, you should look into getting insurance for this specific disaster.

To keep it simple, like any other insurance that you apply for, there are some factors that will be considered, such as your property’s earthquake risk. Your from the insurance officer will look into things such as:

What is your home’s distances to a fault line
What is your home’s construction type (for example: whether it’s a stone or brick home, it has a higher probability of being damaged by an earthquake)
How earthquake-resistant your home is as a whole (1)

Now, if you opt to take on some earthquake insurance, what exactly would this cover? A simple answer would be, the usual physical damage that would incur with an earthquake to your home and your personal belongings.

From the website Nerdwallet.com, here is a list of basic differences that specialized insurance companies will and won’t cover.

Inside an earthquake insurance policy

Pays for:	Doesn’t pay for:
Repairs to your house and attached structures, such as a garage. Your personal belongings, such as furniture and clothes. Additional living expenses, such as hotel bills if you can’t live in your home.	Fires caused by an earthquake. That’s already covered under your homeowners insurance. Vehicle damage. Buy comprehensive auto insurance for that. Floods. You’ll need separate flood insurance, even if the flood is a byproduct of an earthquake. Sinkholes. Some states require insurers to offer sinkhole insurance, or you can typically add it to your homeowners insurance or buy separate coverage. Masonry, such as the brick, stone or rock used for your home’s veneer.

Pays for:

Doesn’t pay for:

Repairs to your house and attached structures, such as a garage.
Your personal belongings, such as furniture and clothes.
Additional living expenses, such as hotel bills if you can’t live in your home.

Fires caused by an earthquake. That’s already covered under your homeowners insurance.
Vehicle damage. Buy comprehensive auto insurance for that.
Floods. You’ll need separate flood insurance, even if the flood is a byproduct of an earthquake.
Sinkholes. Some states require insurers to offer sinkhole insurance, or you can typically add it to your homeowners insurance or buy separate coverage.
Masonry, such as the brick, stone or rock used for your home’s veneer.

(2)

Additionally, you must evaluate your living situation: are you a renter or are you a homeowner? If you are a renter, it may be prudent to get insurance just for your personal belongings. If you own the home, it would be good to see what your options are in terms of coverage. Do make sure that you understand the differences of what an earthquake policy covers and what a homeowner policy covers as well.

These insurance plans do not necessarily have to be expensive, though if you do live in earthquake prone states, of course be ready that the policies are a little higher than most. From Buzzyusa.com, “Despite the difference in rates between states, you can still save money on earthquake insurance policies. If you’re in California, you’re eligible for a 20% premium discount if you adapt your house with earthquake protection recommended by the California Earthquake Authority. Moreover, wood houses will net you a lower premium in comparison to brick ones, or if you live in a newer home and don’t mind installing straps to walls and your roof. Lastly, a home sprinkler system can lower insurance costs.”(3)

It is always a good idea to be prepared, but make sure that you get an insurance plan you really need. Look through the different plans that are offered, especially if you already have homeowner’s insurance in place.