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Earthquake Insurance

Information on Earthquake Insurance


Earthquake insurance is a specialized coverage that homeowners can purchase to protect them from property loss or damage due to seismic activity. As certain regions are more likely to have earthquake activity than others, coverage is often not necessary or even provided in these certain areas. The cost of this protection is calculated by determining the probability that an earthquake can cause major damage to your home. This type of insurance varies significantly from one’s typical policy that covers personal belongings and real estate property and provides coverage that is normally excluded from other kinds of policies.

Earthquake Insurance Explained

Earthquake insurance provides compensation that helps cover the costs of repair or replacement of homes (or business structures) and one’s personal items that are damaged or destroyed in an earthquake. (It does not cover losses attributed to other events, like fire, floods, or wind storms.) This type of insurance will often have a large deductible amount that varies depending on the amount of coverage purchased and, importantly, the location of the covered property.
Those who live in quake-prone areas can obtain this insurance from most regional insurance providers. The typical policy will provide protection for structural damage as well as covered personal property. The personal property payouts for losses are set at a specific dollar amount and this is due to the fact that personal items, like furniture, will often make it through a quake intact as opposed to a fire or flood in which everything will likely be damaged. This helps keep costs down for both the policyholder and the provider. Items, like that prized big screen TV, are far more likely to sustain damage in a quake, so insurance companies will often appraise the values of these fragile personal belongings and then set a fixed dollar amount of coverage for these covered items.

How it Functions

Like all insurance plans, this coverage comes with a deductible. Deductibles often range from 5 to 15 percent. Not that opting for the higher deductible will often result in significantly lowering your premium payments. Once one makes a claim for damage, the deductible is then taken from the amount of the payout. If damages exceed the deductible, you are provided the balance to cover damages.

The Kinds of Coverage Available

Good earthquake insurance has three major components of coverage: The home, personal property and help with living expenses.

Home Coverage

If one’s home is damaged, a policy will cover repairs for such things as wall cracks, ceiling damage and foundation issues. This coverage will most often not extend to landscaping, fences, pools, walls, or separate structures outside of the home.

Personal Property Coverage

This aspect of the policy is what covers appliances, furniture, and electronics and so on. Delicate crystal, plate and porcelain items can be covered with the purchase of supplemental policy coverage. This coverage starts at $5000 and can be extended up to a normal limit of $200,000.

Additional Living Expense Coverage

This aspect provides financial help for the temporary extra expense that is required when one is forced to live away from their home as it is being repaired. Coverage payouts can be provided anywhere from $1,500 to $100,000. These funds can be utilized to cover the rental of a temporary residence, for meals, to cover moving and storage costs, even laundry and furniture rental.

Big Benefits

If an earthquake strikes, having this invaluable coverage can ensure that you are not left homeless in the aftermath. This is the policy that can rebuild your home and keep you financially solvent in the meantime.