Why Purchase Earthquake Insurance?
Right down California runs the famous San Andreas Fault, which was the origin for the legendary San Francisco earthquake in 1906. This seismic event was incredibly powerful with its effects being felt all the way up to Oregon. Frequently Californians are reminded of how it is only a matter of time before the fault will again release yet another great quake and citizens are also reminded of this inevitability by the innumerable moderate and small quakes that are unleashed by the many other faults that are present throughout California, other states and even out in the ocean. For those who live in quake prone areas, good earthquake insurance should be seriously considered.
Earthquake insurance is a kind of coverage that is tailored for homeowners seeking to be safeguarded from the often-overwhelming financial losses arising from damages caused by earthquakes. Certain parts of the country experience more activity than others and, due to this fact, coverage can be difficult to obtain in some areas. The cost of covering one’s home is largely ascertained by the probability of activity and likely severity of damage. Keep in mind that this kind of insurance varies from the usual policy that would cover both real estate and personal property. Earthquake insurance serves the purpose of providing compensation to policyholders to assist in dealing with the expense of repair or replacement of structures and personal property affected by an earthquake. It will not pay out for losses associated with other perils, such as fire, floods, or severe weather. This type of coverage will often have a large deductible payment that is determined by various factors.
The coverage can be obtained from various insurance companies and usually will cover damage or destruction to the covered structure and personal property within. Usually the compensation for personal property losses are specifically determined for individual items as opposed to a number set for all of one’s possessions. This is due to the fact that many personal items, such as furniture, will often come through a quake intact. This can benefit both the provider and the insured as it can help in keeping costs down.
Earthquake insurance coverage amounts are normally determined based on one’s property value. For example, a $250,000 home can be covered for the entire amount, more so if it is in a higher-risk zone. In this case, the deductible will be a predetermined percentage of the total coverage, often being 15 percent. Coverage exceptions will often include valuable jewelry and collectables, landscaping improvements, swimming and structures other than the main residence that sit on the property, such as a garage or storage shed.
Normally there are two kinds of earthquake insurance from which to choose. “Single-Limit” can extend coverage for the whole appraised value of the home. Another choice is the standard plan that extends added earthquake coverage to a typical homeowner policy. A crucial point to remember when considering either one of the two valuable coverage options is how drastic the difference will be between the payment of a 15% deductible prior to receiving a pay out and an out-of-pocket expenditure for the whole cost of the property loss when there is none of this specialized coverage in place. In other words, making the decision to decline this coverage can result in financial calamity.