Do You Need Earthquake Insurance?
Since the very early 1900’s, there have been major earthquakes in 39 states, and still it is estimated that out of the 60 million homeowners in the United States, 75 % of them are either underinsured for earthquake damage on their existing homeowners insurance policies, or carry no earthquake insurance at all. Residents of California State, who live in fear of earthquakes every day, have one of the highest percentages of people uninsured for earthquake damages to their homes. It is estimated that only about 14% of homeowners in CA carry earthquake insurance on their current homeowners policies. The states historically most affected by earthquakes in the United States are Arkansas, California, Illinois, Kentucky, Louisiana, Massachusetts, Mississippi, Missouri, Oregon and Tennessee just to name a few. If you live in a region that is prone to earthquakes, the best way to protect your home is to retrofit and buy earthquake insurance. Many may not be aware that the basic homeowners insurance policy does not cover earthquake damage, and acquiring earthquake insurance can sometimes double your homeowner’s premiums, and it usually provides very limited coverage. However it is an addition that may be well worth your while to gather information about. How much insurance do you need? You will need enough coverage to pay for the rebuilding or repair costs of your home. The amount should be reevaluated about once a year, or after any major changes such as remodeling has been done to your home. What type of earthquake insurance you get will depend on what coverage you want. A policy may include coverage on your house, any other structures on your property, your personal belongings inside your home, additional living expenses while your home is being rebuilt or repaired, and coverage for building codes and ordinances to pay for upgrades or demolition to your home. There are many factors that insurance companies will consider when you are applying for earthquake insurance. You will be asked if your home is brick, or log, has a cement or tiled roof, what kind of foundation your home has, is it located within 100 feet of tidal water, or located on a slope. Was your home built before 1980, and without an earthquake retrofit? As a general rule, homes built within the last 20 years were designed to conform to stricter building codes and will be better equipped to resist the force of an earthquake. Older homes are typically more vulnerable to earthquake damage, and a retrofit would be valuable. Insurance companies will also take into account your geographic location. Those who live in states that are more prone to earthquakes will have higher insurance premiums and deductibles. Those states are also broken up into Seismic Zones, and each zone is assigned a number based on its susceptibility to earthquakes. If you live in a state that is prone to earthquakes, knowing your own seismic zone could help you determine whether you should carry earthquake insurance in addition to your homeowners policy or not.
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