According to the U.S. Geological Survey (USGS), homes in 42 states are susceptible to damage by earthquake in the next 50 years. However, most home insurance does not cover earthquake damage.
Many homeowners choose to purchase earthquake insurance. This covers reasonable costs related to earthquake damage, including your home and your personal belongings. Depending on the policy, it may also cover living expenses during a repair or rebuild.
Who should consider earthquake insurance?
There is no sure way to predict whether your location will be hit by an earthquake. The USGS classifies sixteen states with a “relatively high” likelihood including California, Hawaii, Missouri, Washington and South Carolina, but earthquakes can occur in any state. Risk factors include proximity to an active fault, construction materials, architectural layout, and land slope. You may wish to have a qualified contractor or engineer evaluate your home.
You might also ask yourself some questions: If my home were damaged or destroyed, could I afford to repair or rebuild? What are my options for temporary housing?
What types of policies are available?
Policies vary from company to company. Some have coverage limits for specific items in your home – for example, 20% for onsite structures (such as a garage) and 50% for personal property. Each coverage may have a separate deductible. Others combine coverages and pay all losses under a single “blanket” limit. An insurance agent can help you decide what is best for you. Whatever the policy type, the deductible is likely to be ten to twenty percent of the coverage limit. This requires more spending in an emergency, but it helps keep premium costs down.
If you experience an earthquake, it is important to contact your insurance company even if you think the damage is less than the deductible. Your agent can guide you through an assessment and make sure you’re not overlooking any damages.
When a home is hit by disaster, it can be devastating both financially and personally. Having the resources available to repair your house, replace damaged property and shelter your family can bring you peace of mind.