A strong earthquake can cause major structural damage.
In the U.S., according to the U.S. Geological Survey, each of the 50 states has experienced at least one earthquake since 1900. Over 4,000 quakes of various magnitudes took place across the nation in 2012 alone. Although 90 percent of the country's population lives in seismically active areas, most don't have earthquake insurance. If an earthquake damages their home or business, owners must pay out of pocket to repair damaged or destroyed structures and belongings. Earthquake insurance provides an affordable way of paying for damages that may occur.
Geography
Any resident in a state that experiences earthquakes should consider buying earthquake insurance, especially residents of states that have the highest earthquake rates, such as California, Hawaii, Alaska, Nevada and Washington. Earthquakes also happen in the Midwest, and less frequently, on the Eastern Seaboard.
Earthquakes and Homeowner's Insurance
A standard homeowner's insurance policy does not cover damage from an earthquake, and may not cover fire or water damage stemming from one. Purchase a separate supplemental policy, or add a rider to your existing homeowner's policy to cover earthquake-related damages. Standard condominium and renter's insurance also does not cover losses from earthquakes.
Earthquake Insurance Coverage
Earthquake policies offer different levels of coverage. You can cover just your dwelling, include "accessory structures" such as garages and/or storage buildings, purchase a policy that also covers your dwelling's contents or one that only covers contents. It's a good idea to add the "additional living expenses" (ALE) option to any earthquake policy purchased, so you'll have funds for a hotel room or apartment in case your home suffers damage that makes it temporarily unlivable.
Cost of Coverage
Earthquake insurance premiums depend on the amount of coverage, coverage type, deductible and various risk factors, such as location. Older homes cost more to insure while wood-frame homes cost less because wood withstands quake stress better. Deductibles range from 2 percent to 20 percent of the policy amount, so if you insure your home for $100,000, for example, and it's destroyed in an earthquake, you pay the first $2,000 to $20,000 of the rebuilding cost. In California, the average annual policy for a homeowner costs $722, while a renter's policy to replace belongings ranges from $200 to $300. Those rates can go up significantly the closer the home is to a fault line.
Your Insurance Responsibilities after an Earthquake
If your property is damaged during an earthquake, contact your insurance company immediately, even if the quake happens on the weekend. Describe the damage in detail. Although an adjuster will visit the property, it is your responsibility to document damages. Make a list of your destroyed or damaged items, take clear photos of the damage and include them with any required forms the company provides. Keep receipts for major purchases at another location, i.e. a safe deposit box. Provide copies of receipts for damaged items to the adjuster.
Tags: Coverage Earthquake, damaged items, does cover, homes cost, your dwelling, your home
