If you’re thinking of moving to California, you may want to check your homeowner’s and renter’s insurance policy to make sure it covers you if a major earthquake hits the Golden State.
According to the Insurance Information Institute, about 6,000 Californians die each year due to earthquakes — that’s more than people in any other state. The state is prone to earthquakes because it sits on the “Ring of Fire,” a series of seismic fault lines that include Hawaii, Alaska, Japan and much of North America.
So when an earthquake strikes anywhere in the Ring of Fire, there’s a good chance it will also hit California. The best way to protect your home and possessions is by getting earthquake insurance . You can buy earthquake insurance online or from your local broker.
An online policy covers broader areas than a paper policy but costs more. A paper policy only insures you if an earthquake hits where you live — not if one ever strikes California. Get quotations for multiple quotes from different insurers in your area before applying for any policies. Check with your insurance agent or broker for more information about which companies offer the most competitive rates and coverage options.
What is Earthquake Insurance?
Earthquake insurance is protection against the financial loss caused by a specific category of natural disasters: earthquakes. The coverage is tied to your home and includes legal fees and any damages to your property caused by an earthquake.
However, the types of insurance you need will vary depending on where you live in the world. For example, in Japan, where an earthquake is a near-weekly occurrence, you’ll need additional types of insurance, including earthquake tourism insurance and travel insurance.
How to Apply for Earthquake Insurance
Before you apply for any types of insurance, make sure you’re aware of the requirements and limitations of each policy you want to apply for. The best policy summary online is available on the Insurance Information Institute’s website.
For a paper policy, look up the company’s requirements and make sure you meet all of them. The following steps provide an overview of how to apply for earthquake insurance: Visit the Insurance Information Institute website to get a list of local insurance broker/agencies. Look up the nearest agency to you and see if they can provide information in regards to earthquake coverage. If you’re a homeowner, be sure to include your home in your policy.
This will protect you if a quake were to cause damage to it. If you’re a renter, check if your lease includes any earthquake coverage. If your home is located in California, you can get a free quote from CoverCities, a subsidiary of Nationwide, which offers coverage to a variety of zip codes in the state.
Depending on your risk, insurance companies may offer discounts for certain groups of people, such as frequent travelers who qualify for multiple policies.
Custom homes vs. Earthquakes
A custom home is one that has been built to your specifications. While a conventional house may be built to code, a custom home is not. That’s why a custom home earthquake insurance policy is a bit more expensive. You can expect to pay between 3% and 5% more per year for a custom home than a conventional home.
Some insurers will charge a higher premium for a custom home compared to a conventional home, even though the former is more likely to be hit by an earthquake. It’s because the insurers want to be sure they’re covered in case of a major earthquake that causes large damage to a specific home.
California earthquake insurance: When is it needed, and how much should you buy?
The U.S. Geological Survey (USGS) is the primary source of seismographic data for the United States and does a good job of forecasting earthquakes. However, the USGS doesn’t provide earthquake insurance. You should, however, get a custom home earthquake insurance policy because it’s the prudent thing to do.
The premiums will go up the more expensive the home is, so getting it in writing will protect you from overpayment. Yes, you should get earthquake insurance for your custom home. It’s not just for show. When one of these powerful earthquakes strikes, it can cause significant damage to your home and your personal possessions.
Therefore, it’s in your best interest to protect your home by getting insurance.
Bottom line
If you’re thinking of moving to California, you may want to check your homeowner’s and renter’s insurance policy to make sure it covers you if a major earthquake hits the Golden State. According to the Insurance Information Institute, about 6,000 Californians die each year due to earthquakes — that’s more than people in any other state.
The state isprone to earthquakes because it sits on the “Ring of Fire,” a series of seismic fault lines that include Hawaii, Alaska, Japan and much of North America. So when an earthquake strikes anywhere in the Ring of Fire, there’s a good chance it will also hit California.
The best way to protect your home and possessions is by getting earthquake insurance. You can buy earthquake insurance online or from your local broker. An online policy covers broader areas than a paper policy but costs more.
A paper policy only insures you if an earthquake hits where you live — not if one ever strikes California. Get quotations for multiple quotes from different insurers in your area before applying for any policies.
Check with your insurance agent or broker for more information about which companies offer the most competitive rates and coverage options.
