It is very important to know that the homeowners main policy not cover damage caused by ground movement. Even if you do not live in an area where earthquakes usually occur, you may need earthquake insurance.
Since the beginning of the 20th century, earthquakes occurred in 39 states. Approximately 90 percent of Americans live in areas that are considered seismically active. However, only a small percentage of people buy insurance against earthquakes. Even in California, where earthquake fears are a daily fact of life, less than 15 percent of homeowners have earthquake insurance according to the California Earthquake Authority (CEA), compared with 30 percent in 1996 when the state legislature created the California Earthquake Agency. Every year, more homeowners get rid of earthquake coverage than they buy it, because, according to consumer groups, policies cost too much and cover too little.
Who buys earthquake insurance?
Based on a study by the US Geological Survey, there is a 70% chance that one or more earthquakes of 6.7 or more will appear in the San Francisco Bay area over the next 30 years. (An earthquake of magnitude 6.7 is equivalent to the Northridge earthquake of 1994, which killed 57 people and caused damage in the amount of 20 billion dollars).
Although earthquake insurance is sold to residents in all 50 states, Californians buy the most earthquake insurance.
The Earthquake Education Center at the University of Charleston Southern University claims that there is a 40-60% chance of an earthquake from an earthquake somewhere in the eastern United States over the next 20 years.
This prompted the South Carolina Insurance News Service to recommend that residents of this state consider buying an earthquake policy. “Most homeowners and rental insurance policies do not cover damage caused by an earthquake, but coverage can be added to most policies as approval for an additional premium,” says Allison Dean Wright of the South Carolina Insurance News Service. “Earthquake insurance can be quite inexpensive. Contact your insurance agent or company to find out what costs will be for your home. ”
The new Madrid Failure, which passes through Arkansas, Kentucky, Missouri and Tennessee, also insure insurers. According to the Institute of Insurance Information, there is a probability from 40 to 64 percent that the region will undergo an earthquake with a magnitude of 6.0 over the next 15 years. Availability of earthquake coverage has become a problem in some regions of these states. For those who do not remember, including someone who was not alive in 1811, when it happened, the earthquake cemented the area in New Madrid with enough force to change the course of the Mississippi River and ring the church bells on the east coast .
“The potential magnitude of the catastrophic New Year's earthquake dictates that we are approaching the preparation on a regional basis,” said WR Padgett, chairman of the board of the Earthquake Central Consortium. "No state can begin to solve all problems."
What does earthquake insurance cover?
Ideally, your earthquake insurance policy should cover the cost of replacing or repairing your damaged property. When choosing a plan, you can consider several options, including:
- Does the policy include housing only? Are accessory structures also included, such as garages?
- Will your policy pay for the maintenance of your home and additional living expenses if your home is badly damaged or destroyed?
- Are there any exceptions or limitations to cover?
- What deductible amount should you pay before insurance starts?
Earthquake insurance rates are determined differently by each insurance company and can vary widely depending on several factors. As a rule, older homes are more expensive to insure. Wooden houses get higher rates than brick buildings because wood tends to withstand shaking stress. In addition, areas have a scale of 1 to 5 on earthquake probability, and this can be reflected in earthquake insurance rates. Since earthquake insurance is a type of catastrophic coverage, most policies have a high deductible — usually 10 to 15 percent of your coverage limit.
For residents of California, one option is to get insurance through a California earthquake agency. CEA coverage is offered only as a companion policy for customers who have homeowners insurance with a partner partner. CEA is a state-government partnership that provides earthquake insurance for homeowners, tenants, and condominium owners in California. Many CEA insurance companies offer a major earthquake insurance policy, which has a 15 percent deductible. Californians can also buy earthquake policies outside of CEA. In California, there is a small group of companies that offer earthquake insurance on a standalone basis.
How much earthquake insurance should I buy?
If you decide to purchase insurance against earthquakes, remember that you must buy enough to cover the costs of rebuilding your home and replacing broken things. The amount of insurance you buy should be based on the cost of replacement and reconstruction, and not on the market value of your property and property. It should also be noted that renovation costs often rise after a disaster due to the demand for construction services.
You must also find out your claim rights before signing for any earthquake insurance policy. It is important to know how much time you should apply after an earthquake. In some cases, the damage from earthquakes does not immediately appear.
