Earthquake insurance pays for covered losses to your property caused by an earthquake or volcanic eruption, up to the limits you select.
Although the California Earthquake Authority (CEA) offers earthquake insurance for individually owned residences, our representatives are able to find most homeowners better priced, more comprehensive coverage.
Know What Earthquake Insurance Covers
In general, earthquake insurance pays for damage to a home or personal belongings that result from an earthquake. This could include destroyed valuables or collapsed walls inside the residence.
Some types of earthquake-related damage might not be covered by the policy. For instance, a flood that an earthquake causes may not be covered by an earthquake insurance policy. This includes tsunamis, tidal waves and other types of flooding. Each policy may provide coverage for some damages but not others; therefore, it is crucial for a homeowner to read the earthquake insurance policy thoroughly.
Premiums and Deductibles
As with all insurance policies, the premium for earthquake insurance coverage is calculated by predicting the probability that your home may become damaged from that event. Earthquake insurance premiums vary substantially due to a number of factors.
Geography matters the most. Earthquake insurance in high-risk zones will have more expensive premiums than homes in areas of low-risk zones. However, the construction type, age and value of your home will affect the premium as well. Wood framed homes withstand earthquakes far better than masonry. In fact, unreinforced masonry (URM) may be outlawed in many high-risk zones. New construction utilizes design methods that make them more earthquake resistant. These factors determine the cost of earthquake insurance. In addition, the deductible is frequently based on a percentage of the value of the house. On a $300,000 home, the deductible would cover damages in excess of $45,000.
How Much Earthquake Insurance Should I Carry?
If you have decided that earthquake insurance is appropriate for your situation, then answering the following questions will help you determine how much coverage to carry.
- Would you be able to afford replacing your household belongings if an earthquake damaged or destroyed them? This includes beds, furniture, sofas, TVs, electronics, computers, art, appliances and clothing. How much would it cost?
- Can you afford temporary lodging should an earthquake make your home uninhabitable? How much would the additional living expenses cost?
- How much equity is in your home? Can you afford to lose that equity should an earthquake damage or destroy the residence?
- Do you hold a mortgage or line of credit on the house? Would you be able to continue repaying those loans while replacing or rebuilding your home?
The insured value of your home, the value that is listed on your homeowners insurance policy will be the same for an earthquake insurance policy. If your home is underinsured on the basic policy, it will be underinsured on the earthquake insurance policy as well.
Learn more about your Earthquake Insurance Coverage options.
Call now to speak with one of the friendly agents in our San Francisco office, at 415-242-8777.
We will review your current coverage free of charge, discuss your current risks and search for the best insurance products to fit your individual needs.