The Importance of Earthquake Insurance
The recent temblor in the area north of San Francisco Bay proved once again that California is earthquake country. However, earthquakes can occur in many parts of the country, as was proven by the big shake that took place in and around the nation's capital in 2011. Although nobody knows where the next seismic disaster will occur, property owners can at least prepare themselves by having earthquake insurance.
Earthquake coverage is a type of property insurance that is normally sold separately and is available to homeowners or in group-form, to condominium owners. Apartment owners who wish to insure their properties must apply for commercial policies. The cost and nature of the coverage will depend upon a number of factors. A basic policy will only cover the direct damage to the home caused by the quake and will usually have a moderate deductible, which is the amount the property owner will have to bear. A property owner with a deductible of 10 percent will have to pay the first $20,000 to rebuild a home valued at $200,000. These basic policies may not cover damage to the garage or to other structures on the property, or to furnishings.
More elaborate policies may cover damage inflicted on accessories to homes, including pools and patios, and to furniture, clothing, vehicles and other items that may be destroyed in an earthquake. Policies may also cover indirect earthquake damage, including temblor-induced fires, and help out with the living expenses of residents whose homes are uninhabitable as a result of the disaster.
In addition to the nature of the coverage, the location of the property will be important in determining the cost of the policy. Earthquake-prone areas will obviously have higher rates, although the nature of the soil on which a property exists and the composition of the building will also factor in the cost. Homes with wooden frames are generally sturdier than those made of brick, and are thus less expensive to cover.
Earthquake insurance will help relieve homeowners from having to turn to government programs in the event of a disaster. However, potential buyers should get all the facts from an insurance agent before they consider purchasing such coverage. Our advisors are ready with your facts.