Why Having Earthquake Insurance is so Important

An earthquake is the result of a collision between tectonic plates under the earth’s surface. If you live in an earthquake prone zone, this means that you will live either along or near a fault line, which is where the tectonic plates will meet. 

If an earthquake occurs under the sea, it can result in tidal waves developing. Effectively, this means that if you live along the coastline, you could be susceptible to water damage and flooding. The event of an earthquake can be quite devastating and it is always a good idea to purchase earthquake insurance. 

What is earthquake insurance?

Earthquake insurance must be purchased separately from your property insurance because it will not automatically be included. This form of insurance will need to be purchased if there is a high risk of earthquakes in your area.

Earthquake insurance is likely to be most effective if you home is completely destroyed rather than damaged. The rates of insurance will depend on the location of your home and the probability of an earthquake happening. Insurance rates are likely to be cheaper if your home is made from wood rather than brick as wood can withstand the vibrations better. 

What will it cover?

An earthquake insurance policy will cover the cost to either replace or repair the damage that has been caused to your property. When selecting the right policy, you should consider whether it covers just your home dwelling or if other buildings, such as garages and shed, are also included. 

It is also important to identify if the policy covers the contents of your home and your car and if there are any other provisions that are included within it such as living costs if your home is completely destroyed. You will also need to ascertain if there are any exclusions in the policy and what you will have to pay out for yourself before the policy takes effect. 

How much does it cost?

The cost of earthquake insurance will vary depending on many factors that include the area, the age of the property and the material it is built from. Where you live and the proximity of your property to a fault line are the main contributing factors for many insurance companies. 

Most areas are graded from 1 to 5 depending on the likelihood of an earthquake happening. If you live in California then there is a special governmental provision which has been devised to assist their residents in the event of an earthquake. Another factor to consider is the age of your house. This is because older houses cost more to insure than newer houses. The materials that your home is made from will also affect the overall insurance premium for your home because certain materials, such as wood, will react less to the stress invoked by an earthquake.

The overall cost of earthquake insurance will vary between companies so it is a good idea to shop around and compile a list of quotes. Certain banks will also offer a similar service.