How Do I Know If I Need Earthquake Insurance?

If you live in a state prone to earthquakes, investing in a good earthquake insurance policy is a smart move. In 2017 alone, homeowners claimed around $1.6 billion in earthquake insurance around the globe.

But what about those who do not live in a state affected by earthquakes? To be on the safe side, they too should consider buying an earthquake insurance policy. There may be an earthquake anywhere, anytime. Even though earthquakes are more prevalent in California, they can happen in any state. And if you have an earthquake insurance coverage, you won’t need to worry about the repair costs.

Earthquake insurance needs to be bought separately, as it is not part of your homeowner’s insurance coverage. It compensates you for the damages done to your home. Keep in mind that not all damages that your property sustains during an earthquake may be covered by this policy such as a flooding situation.

A flood which is the result of an earthquake and the damage it inflicts on your property can only be covered by a flood insurance policy. However, before you sign up for any coverage, you need to read the fine print so you know what is and is not covered under it.

Why Should You Consider Getting Earthquake Insurance?

Do not be under the false impression that a government disaster program such as FEMA will come to your aid after an earthquake hits your area. These types of government programs will not help you recover your losses after an earthquake.

Instead, these types of government programs assist people immediately after an earthquake occurs by providing them with clothing, food, temporary shelter, and medical assistance, if needed. You will have to rebuild your home and replace the contents of your home from your own pocket.

Even if you have received a low-interest loan through FEMA to reconstruct your home, you will still have to repay it. If you reside in an area prone to earthquakes, obtaining earthquake insurance through your insurance provider is a must, as that is the only way for you to repay for the damages and losses occurred to your home and personal belongings during an earthquake.

Does Everyone Need Earthquake Insurance?

To answer that question, you need to look at several factors. For instance, most people who do not reside in an area prone to earthquakes choose to not invest in earthquake insurance. Most people do not choose to buy it because it is quite costly to get.

Deductibles can amount to 10% of the value of one’s home and in some instances, it can be even higher. If you are not choosing to buy earthquake insurance because you do not want to pay for it, know that in the event an earthquake does occur, you will have to pay yourself for all the damages that your property has sustained.  

If you reside in the West, which includes states such as Washington, California, Oregon, Utah, Wyoming, Nevada, Illinois, Missouri, Arkansas, South Carolina, Kentucky, and Tennessee, you should seriously consider buying an earthquake insurance policy. Better to be safe than sorry!

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