Do You Need Earthquake Insurance?
The property market has been hit hard by the last few years of natural disasters, from hurricanes to earthquakes. However, it is not just Californian and Caribbean residents who are at risk; hurricane insurance has become a national requirement for anyone living in a flood zone. Should you consider earthquake insurance for your home or apartment?
The short answer is: yes, you should get an earthquake policy. But the long answer requires some careful and thoughtful consideration before buying such a policy on the open market.
Earthquake Risk Factors
If you live in an area with a high risk of earthquake activity, you must get an earthquake policy. This is because the rebuilding and home repair costs can run very high. Even if the first tremor does not damage your home, it can easily fall victim to a second quake that occurs in quick succession. The same goes for any other natural disaster, particularly flood zones, which are also often hit by flash floods.
It is also essential to consider how much you can afford to spend on insurance for your home. Earthquake insurance can be costly, and this is where the long answer begins...
The Type of Earthquake Coverage
There is currently a large variety of earthquake insurance policies on the market, from very cheap policies to more expensive, high-risk types of coverage called "high-risk policies". However, there is no doubt that your best option for earthquake insurance is a "standard policy" as long as it meets the following criteria.
1. It must be written by an insurance company with a proven track record.
2. It must offer enough coverage to protect the property in case of an earthquake fully.
3. It must be renewable, meaning you can renew the policy later if you choose to keep it.
4. It should be comprehensive enough that it covers all damages and injuries as a result of the quake. Some policies have been known to leave out certain costs or forces, such as floods and subsequent fires caused by broken water mains.
Additionally, you should look for a policy that fully covers your valuables and other personal items. Mirror frames, jewellery, expensive cameras and so forth should be fully covered.
5. It should include adequate amounts of deposit in the coverage excess amount, which is the difference between what your home is worth at the time of an earthquake and what it will cost to rebuild it.
6. It should cover your property's value and any insurance payments made by insurers following an earthquake.
7. It should cover any legal costs you may incur to recover from an earthquake or other natural disaster.
The above represents the most critical factors you should consider when buying earthquake insurance, but there are a few others. It would help if you always read the fine print of any policy before committing to it and also make sure that it does not contain many exclusions. These are parts of the policy that are not fully covered, including earthquake-related damages that are the result of flooding, mudslides and other forces.
If you need to buy a policy for earthquake insurance, the best thing to do is to check with your local insurance agent about their earthquake-related policies and ask for a good recommendation. But make sure that the policy meets all of the above criteria before buying it.