Earthquake insurance is a specific type of policy that covers damage to your property and home in the event of an earthquake. Regular types of home insurance, renters and condo insurance do not typically cover earthquakes.
Reasons to get Insurance for Earthquakes
Earthquakes have the potential to cause significant home damage and total losses. The side to side shaking destroys home foundations. It causes cracks in walls, and it can cause the roof to cave, crack or loose shingles. In severe earthquakes, the entire home can collapse into a pile of rubble.
Earthquakes typically happen on the west coast and in the center of the United States. However, earthquakes can occur in all 50 states. Individuals that live along fault lines or in earthquake prone areas should seriously consider adding an insurance policy for earthquakes.
Without earthquake insurance, the homeowner would be 100 percent responsible for repairing or replacing his or her home. If the home needed extensive repairs or was determined to be uninhabitable, the homeowner would also be responsible for paying for temporary housing and living costs.
Benefits of Insurance for Earthquakes
A homeowner that has insurance for earthquakes can expect to be reimbursed for the cost of repairs to their home or the replacement of their home up to the coverage limits. The homeowner can expect to receive compensation for their belongings, and earthquake policies typically cover the cost of temporary living arrangements while the homeowner either repairs his home, rebuilds or finds and purchases another home.
Earthquake Policy Costs
Insurance for earthquakes is based on the coverage limits of the homeowners’ policy. The deductible or amount the homeowner has to pay before the insurance policy starts covering the expenses is typically between 10 and 20 percent of the total limits of the homeowner’s policy. The coverage amount of the home is typically set between 50 and 70 percent of the value of the homeowner’s policy, and personal possessions are covered at a fixed amount.