Earthquakes can happen in any state, though some regions, such as the west coast, are more generally active than others. However, in 2015, Oklahoma had the most earthquakes in the nation, though it is known more for being part of Tornado Alley.
The truth is that one severe temblor in any state is enough to damage and destroy property. Earthquake insurance can help property owners, especially those in quake-prone areas, rebuild their homes and businesses, as well as their lives, after damaging seismic activity. This type of protection, though, and how to get it may seem baffling. To simplify things, let’s look at some important points about earthquake insurance.
To Buy or not to Buy
Standard home insurance and business owners’ policies do not pay for damage from earthquakes. That protection is only found by purchasing an add-on or a separate policy. It covers damage to homes and businesses from quakes, including structural destruction as well as property devastation.
So is earthquake insurance worth it? The short answer is yes if you live in a region known for having regular tremors. Getting it need not be complicated, either, if you follow a few simple steps.
- Start by checking with your current insurer to see if quake coverage can be added on to your current protection package.
- If earthquake insurance is not available as an add-on, then you may be able to buy a separate policy from your insurer.
- If your insurer does not offer this type of policy, or you just want to shop around a bit for the best price and coverage, this is easy, too. Look to experts who can help you choose the best policy for your needs.
It is important to remember, though, that if your area has just had seismic activity, most insurers will not sell new earthquake policies for one or two months.
A Review of Standard Protection
While standard homeowners‘, renters‘, or business owners’ policies do not provide comprehensive, focused earthquake coverage, they are excellent supplements to dedicated tremor insurance. However, in the event your structure suffers damage in a quake and you are not carrying specialized coverage, your standard policies can help defray some costs.
- If gas lines are damaged and your business catches fire, for example, standard policies will cover this damage.
- Likewise, should your business have to be closed after a major temblor, typical coverage will offer financial help during periods of closure or while repairs are being made.
- Normal vehicle insurance will pay for damage to automobiles and business vehicles, though it is a good idea to check with your insurer to understand exactly what your policy covers.
- Workers’ compensation will cover injuries to employees who are on the job when a quake hits.
The truth is that nobody wants to think about needing specialized policies such as earthquake insurance, but disaster can strike anytime, anywhere. Planning ahead is solid business practice and makes good financial sense.
An experienced professional can help you navigate among various policy options. For example, carrying a low deductible is the most helpful should you file a claim, but it does raise premium rates. There are many dedicated policies that cover damage from tremors, so it is important to know the details about this type of focused protection.
Quake Coverage Demystified
Specialized policies covering seismic upheavals cover both structural and property damage, but you need to understand the details about exactly what this type of protection covers—and what it does not.
Earthquake insurance pays for these types of damages:
- Personal and business belongings, such as clothes and furniture. There is a set limit on payouts, so you may need to consider buying additional coverage if you have numerous items to protect, such as computers and delicate equipment at a business.
- Structural repairs, including attached buildings such as a garage
- For homeowners, additional living expenses if a residence is uninhabitable
Earthquake insurance does not pay for these damages:
- Vehicle damage—buy comprehensive auto insurance for this
- Fires caused by temblors—standard homeowners’ and business owners’ policies pay for this
- Floods—you need a separate flood insurance policy, even if an earthquake caused a flood
- Sinkholes—sinkhole insurance can be bought as an add-on or a separate policy
- Masonry, including brick, stone, and rock used for a structure’s veneer
Quake policies may include protection for carports and sheds and pay for debris removal. Optional coverage you can purchase may include emergency repairs, building code upgrades, and land restoration.
The Cost of Coverage
When you invest in insurance that covers tremors, you are paying for protection that can deliver peace of mind. How much is earthquake insurance? How much is a worry-free life worth to you? An experienced agent can guide you through coverage options that fit your needs and your budget.
Compared to homeowers‘ and business owners‘ coverage, quake policies have a high deductible, which is the amount insurance companies take out of the claim payment you receive. Generally, insurers will deduct 10 percent to 20 percent of your dwelling or business coverage limit.
Another difference between specialized seismic coverage and typical homeowers‘ and business owners‘ insurance is that while standard policies often have just one deductible that applies to most of your structures and possessions, some earthquake policies use separate deductibles for structures and personal or business property. You should ask potential insurers whether they have one overall deductible or use separate ones.
Policy costs are determined by a number of factors.
- Coverage limits
- Your zip code
- The age of your structure
- The soil type on your property
- Your structure’s rebuilding cost
- Your area’s proximity to fault lines and seismic activity
A sampling by NerdWallet of temblor policy rates from the California Earthquake Authority shows, for example, that a renter may pay less than $300 annually for $50,000 in personal property coverage with a five percent deductible and $1,500 for loss of use.
Let us help
Get the protection and peace of mind you deserve with the right earthquake policy. Contact us at BOLT Insurance Agency today, and we will answer your questions and help you choose the best quake coverage for your needs.