Questions to Ask Before You Buy Earthquake Insurance

By April 1, 2016HOME INSURANCE

Earthquakes are actual concerns for property owners, particularly for those who live near fault lines. But most homeowners’ insurance plans do not cover loss and damage brought on by earthquakes. Following an earthquake, a family may not be able to live in their house for several weeks, or even a few months. This can be devastating for family members already impacted by a natural disaster and it’s the reason why many households choose to buy earthquake coverage. However, it is important that you ask yourself a few questions before investing in earthquake insurance.

1. What’s your risk profile?

How close do you live to a fault line? Is your foundation a post and pier or a slab? Is the house made of a wood frame construction? Is your home a “soft story” (living area constructed over the garage)? Are you currently on fill or bedrock? What kind of equity do you have in your house?

2. Will you be able to pay for rebuilding or repairs?

What if you couldn’t afford rebuilding or repairs? Earthquake damage frequently requires repairs, which is very costly. Are you able to afford an insurance policy with a 10 percent rather than a 15 percent insurance deductible and if so, how much will the destruction need to be before coverage will kick in?

3. How much insurance do you need?

As a beginning point, consider what it might cost to totally rebuild your house after an earthquake. You can use your agent to figure out specific protection limitations for your house, living expenses and personal expenses if you are unable to live in your house after an earthquake. You and your agent may also work together to reach an insurance deductible that is more convenient for you. Some people choose deductibles as little as five percent to make sure that they are able to rebuild if necessary.

4. Do you really need earthquake insurance?

Whether or not you should purchase earthquake insurance coverage might depend on numerous factors that include:

  • The rate of recurrence and intensity of earthquakes in your town
  • The chance an earthquake might cause significant damage to your house
  • Whether your house is built to endure an earthquake of reasonable strength
  • Whether you can absorb the price of replacing your personal and residential property

If you do buy earthquake insurance, you’ll likely want to buy enough to pay for the expenses of rebuilding your house and replacing harmed and damaged personal property. What this means is the amount of coverage you buy generally should be based on reconstruction or replacement costs and not the present market value of your house and belongings. Also, you might not notice some damage to your house or belongings right after an earthquake, therefore make sure the policy you buy provides you with adequate time for you to find all damage and file a claim.

We’ll help you get the right coverage. Call Hotwire Insurance Services at (858) 277-2719 for more information on San Diego earthquake insurance.

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