Risk of Earthquakes
The risk of earthquakes can vary greatly depending on where you live. For example, California is known to be at a higher risk of earthquakes compared to other parts of the United States. However, earthquakes can happen anywhere and at any time, making it essential for homeowners to understand the potential damage that can occur and to take the necessary steps to protect their homes and families. In recent years, the Midwest region has been found to be at relatively high risk for earthquakes due to a fault line that runs through several states in the region.
Cost of Earthquake Insurance
Given the potential for significant damage from an earthquake, coverage is generally expensive. Your premium will depend on factors such as your location, and the age and structure of your home. Earthquake policies also have a minimum percentage deductible, which can be up to 20% of total damages. A minimum deductible percentage is determined by the location and construction type of your home. Dwellings located in areas that are prone to seismic activity will have higher minimum deductibles than those located in less active areas. This means you could still have significant out-of-pocket costs in the event of an earthquake. Higher percentage deductibles can be selected above the mandatory minimum and may result in lower premiums.
When considering the cost, it’s important to weigh your risk of experiencing an earthquake and your ability to survive the financial aftermath of such a catastrophic event. It’s also important to keep in mind that government aid for earthquake victims is typically limited to low-interest loans that must be repaid.
Side note: Many insurance carriers have restrictions that delay the binding of an earthquake insurance policy following an earthquake of a pre-determined magnitude for a specified number of days. For example: You may not be able to bind an Earthquake policy for 10 days following an earthquake in excess of 6.0 on the Richter scale. Thus, waiting for an earthquake to happen before buying a policy is not an option.
When purchasing a policy, be sure to read it carefully to understand what is covered and what is not. Find out if your policy covers your house and garage, if it covers additional living expenses, and if there are any exclusions or limitations. Additionally, find out how much time you have to file a claim following an earthquake, as damage may not be immediately apparent.
Concklin Insurance Agency is here to assist you with finding the coverage the is right for you. Talk to one of our experienced insurance professionals about additional coverage recommendations to keep your home and belonging protected.