You can’t ask a writer, which is their favorite alphabet. He loves them all. The same goes for you too. You certainly love all your property and can’t risk losing them. The first thing would definitely be a sense of freedom. You have the ability to control your life and your assets. But, what if on a fine morning, you wake up to hear that a gruesome earthquake has badly hit all your favorite stuff.
That’s something really depressing even to think of. And quite obvious, if I were standing on your boots, I would have to decide to opt for an earthquake insurance policy. Worry not, here’s a quick guide as to how to proceed with a particular earthquake insurance policy.
Why Earthquake Insurance is not Home Insurance instead?
Firstly, you can never deny the fact that an earthquake has immense potential to wreak havoc on your home. Wait! Does that mean you should definitely take home insurance? Well, it is practical of no use. Damages by earthquakes are not included in homeowner’s insurance. It certainly points out to the fact that earthquake insurance needs to be bought separately. So, I prefer to instead add earthquake insurance to my policy by endorsement. It’s also a plausible idea to find the right house when relocating.
A mere standard home insurance policy simply isn’t enough especially if you are living in an area which is prone to seismic activities. According to the Insurance Information Institute, millions of people in over 40 states are at risk of earthquake damage to their homes or personal property. And please don’t get from the skies if you are one among these million.
Some Tips to keep in Mind to choose the Right Earthquake Insurance policy
If you are still confused about whether an earthquake insurance policy is worth investment, perhaps this story can help you ideate. The 6.7-magnitude, 1994 Northridge quake in California resulted in 195,000 claims. A single earthquake resulted in claims at an average of $30,000 each—or $60,500 in today’s dollars. How crazy is that!
But, don’t let that happen to your property. To get the best deal, do a little digging, and assess the right kind of coverage.
The crucial factors in determining a property’s earthquake risk are:
- The distance between your home and the nearest fault line – how far is your home from the active line of inevitable destruction
- The materials used to construct your home – earthquake resiliency of the materials. For instance, if yours is a brick home, there are higher chances of destruction by an earthquake hit
- The technology in place to keep your home safe – how earthquake-resistant your home is
The Coverage you need versus the one you’re getting
For better coverage, you certainly have to spend more money. Higher the penny, the more the coverage. But, it’s indispensable that you know the actual premium you need to spend to get a particular level of coverage. The best way for any layman is to understand the rates and the deductibles.
The insurance company will decide the premium you need to pay, based on certain factors:
- Your home’s proximity to a seismic zone
- Your home’s age
- Your home foundation and construction material type
- The deductible you choose
- The cost to rebuild your home
- Any additional coverage like secondary structures
Is Earthquake Insurance worth Investment?
The great deal lies here – you get earthquake insurance while you also get coverage from volcanic damages. Remember, the very word ‘seismic’ incorporates both earthquakes as well as volcanic activities. And, you can opt for the appropriate earthquake insurance for renters, even if you are a renter.
Besides, coverage under earthquake insurance includes repairs to your home for structural or other interior damages caused directly by the quake. It even covers a complete reconstruction of your house, if only the remains can be found after the earthquake! Surprisingly, it might even extend to any additional structures, such as a shed or detached garage. but that sometimes requires an additional policy rider. Your earthquake insurance policy would even include coverage for personal property, such as jewelry and other valuables, up to an amount you decide and the premium you agree to pay.
To the extent of surprise, your earthquake insurance policy can even cover the emergency repairs needed to prevent further damage, necessary building code upgrades, and required land stabilization.
The must-have policy to defeat the demon – Earthquake
With a big round of positivities imbued within earthquake insurance policies, there’s something you need to know. If you’re willing to get fire and water damage, even if it happens due to an earthquake, unfortunately, that won’t happen because it comes under basic hazard insurance, just as exterior water damage falls under the ambit of flood policy.
Nonetheless, earthquakes are indeed demons that need a strong army to defeat! So, why wait for your entire house to fall down crumbling? Instead, get protection much before your ground starts shaking and you start sweating!