Earthquake Insurance

Earthquake Insurance for High-Risk Renters and Property Owners

There are certain parts of the world where earthquakes occur. In the U.S, most quakes take place in the Western region, such as California and Alaska. Quakes occur more often in Southeast Asian countries, located along the Alpide Belt. However, the phenomena occurs anywhere in the world where there are fault lines. Property owners must evaluate their individual needs and assess the potential damages that could result from these quakes.

The Policyholders

Earthquake insurance is only made for people who live in disaster zones. Policyholders are owners of different types of property, such as single family homes, townhouses, ranches, residential apartment buildings, etc. Pools, barns, and separate nonresidential buildings are usually not covered.

The Policy

Earthquake coverage must be purchased separately from homeowner’s insurance. Many plans include high deductibles to cover total destruction of property, and the premiums are based on the deductible costs.

Insurance companies use the damage ratio (DR) that includes the number of damages and the cost of the property. Insurance rates vary based on the geographic location, the individual property’s value and the values of surrounding properties. Rates are the highest for older homes that are made of multiple stories and not kept up to safety codes.

Coverage options include the home, personal belongings, and temporary living arrangements. Condo and apartment renters use this type of insurance to pay for personal contents with limits that vary from $10,000 to $100,000. While their home is being repaired, they use the funds to pay for alternative living costs.

Most policies cover the natural disaster itself but not the fires, floods or mudslides that are caused by it. Auto insurance covers all damages to your vehicle, and flood insurance is purchased separately. Some homeowner’s insurance plans include certain damages, such as fire or broken items, so policyholders should ask about their options.

Many earthquakes are known to be catastrophic and destroy thousands of homes within minutes. Without coverage, renters and homeowners are not able to rebuild their homes or receive temporary living expenses. All over the world, earthquake insurance provides total peace to mind to people living in high-risk areas.