Do You Need Earthquake Insurance?

It is absolutely crucial to consider if you will be financially protected in the event of an earthquake, even for those that do not live in an earthquake-prone area. Earthquakes can occur just about anytime and anywhere. When they do take place, they have the potential to cause catastrophic damage to your home. This damage may put you in a financially devastating situation. However, if you have proper earthquake insurance coverage in place, the burden may be bearable. How do you determine your risk exposure, and what type of insurance coverage may be the best for you? Here's what you need to know.

What Exactly is Covered with Earthquake Insurance?

It just takes one big quake to cause catastrophic damage to your home. Typically, earthquake insurance will cover dwelling (repairs or rebuilding needs), personal property (replace damaged items) as well as loss of use (pays for living expenses if you need to live somewhere else during repairs). There are a variety of coverage riders available. You may be interested in speaking with your insurer about building code upgrade coverage regarding needing to rebuild your home at an increased cost if the original structure is no longer compliant with current building codes. Earthquakes can lead to a range of issues to cause other problems of their own. It is helpful for you to know what insurance policies kick in after an earthquake. For instance, if an earthquake causes a pipe in your home to burst, causing water damage in your home, will your coverage step in? In this particular event, it will likely be your homeowner's insurance that would cover the damage repairs. However, if the earthquake were the cause of a flood in your home from an external source, it would be flood insurance that would step in for this. If an earthquake causes vehicle damage, an auto policy would be needed to pay for repairs. Earthquake insurance doesn't cover all damage caused by an earthquake, as it covers specific scenarios that are not covered in the other policies.

Other Considerations of Earthquake Insurance

The cost of the policy depends on the amount of coverage needed, the chosen deductible, and the age and location of the home. Factors to consider while deciding if earthquake insurance is right for you:

• How close the home is to active faults
• Frequency of earthquakes in your area
• When the last earthquake occurred near you
• Your home’s construction type (layout, materials, quality)
• If your home was built with earthquake-preparedness in mind
• The type of land your home sits on (soil, slope, etc.)
• Annual rainfall rate
• Home value (contents included)
• The cost to insure the home

You can speak with your agent for a better understanding of these components. The three main questions that you and your agent will discuss together will be:

• Likelihood of an earthquake occurring
• The likelihood an earthquake would cause damage to your home
• Your ability to afford home repairs after an earthquake without the help of insurance

Do Renters Need Earthquake Insurance?

Even if you do not own your home, you will still want to protect your possessions. With the risk of your items shifting around and potentially becoming damaged or having to leave your rental while repairs are made to it, you may need extra cash to cover these expenses. Renters earthquake insurance is available to pay for the costs associated with coping with earthquake damage as a renter.

About David G. Sayles Insurance Services

At David G. Sayles Insurance Services, we help our clients decide which of these options is best for them based on their current situation and risk factors.  Contact us at 1-855-977-1842 or insureme@dsayles.mysites.io for a consultation!