In the event of an earthquake, the foundation of your home could collapse, but your financial foundation should not and does not have to collapse. Clearly, and although earthquake damage can be severe, the majority of home owners are not minimizing their risk in this area.
Can’t I do Without Earthquake Insurance?
Like all insurance, the hope is that it is never required. However, this is an essential and affordable coverage for your property. Though you may assume you are fully protected, most home insurance policies do not, in fact, protect from earthquake damage.
Normally, it is a simple add on to a policy, with an individualized premium and deductible. Depending on your location, the additional insurance is relatively inexpensive and something everyone should add to their current policy.
Additional Coverage and how the Deductible Works
Commonly, deductibles for earthquake insurance are higher than your traditional home insurance policy. Another thing to note is that these deductibles are normally calculated as a percentage. In other words, your total loss is calculated against your percentage.
For example, if you have earthquake coverage with a 5% deductible on your $200,000 home and $50,000 earthquake damage is caused to the dwelling, you will be responsible to pay the first $2,500 of the claim.
How will a Strata Affect You?
You may be assessed a portion of your building’s deductible if you live in a condo and your building is damaged by an earthquake. Fortunately, you can purchase protection for this specific type of situation. So, in the event you are charged for your portion of the deductible, you will be covered.
Renters Should Acquire this Insurance
Rental insurance, like most home insurance policies, does not protect renters from earthquake damage and the losses incurred. Renters who want to insure their belongings against earthquake damage will likely need to also find a separate earthquake insurance policy on top of their renters insurance.
Things you should know about Earthquake Insurance
One should review the following to determine protection coverage in the event of an earthquake:
Is earthquake insurance a part of your existing policy?
Review your current home insurance policy and consult your insurance adviser for confirmation.
If you have added a rider for insurance coverage, do you understand exactly what is covered?
If you have earthquake coverage, are you covered for additional living expenses should you being unable to live in your home while it’s being repaired?
Hotel accommodations can quickly add up, it’s important that you have enough coverage to last you until your home is safe to return to.
Depending on how your house was built, the type of materials, and the location, your costs could be quite varied. Your insurer may be able to advise you of things you can do to cut the risk of earthquake damage to your home.