Earthquake Insurance The Pros and Cons of Purchasing Earthquake Insurance


Purchasing earthquake insurance in addition to your traditional homeowner’s insurance policy will provide extra peace of mind, especially if you live in an area that has a high probability of seismic activity developing. Traditional homeowner’s insurance policies do not cover “proximate causes” like firs, theft, mudslides, earthquakes and more. Buying earthquake insurance must be a separate act for those who wish to extend the range of their coverage. You should be aware right up front that earthquake insurance is not cheap.

The pros and cons of earthquake insurance:

Obviously, earthquake insurance is a risky bet by nature. The chances of sustaining damages to your home from an earthquake are generally low for the vast majority of Americans. Given that its expensive, and the chance of using it are low, most people simply don’t ever purchase it. And even in areas like San Francisco where the probability of experiencing damage from an earthquake is relatively high, most residents still don’t purchase it; it’s expensive and it comes with high deductible points that most people couldn’t generate even if they needed to.

For those who live in an earthquake-likely zone, and that have accrued substantial equity in their homes, earthquake insurance is a far more feasible bet. After all, earthquake insurance can cover the losses from damages resulting from seismic activity and save you from financial devastation.

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What does earthquake insurance cost?

There are a variety of factors that will determine what you pay for earthquake insurance, including:

  • Your home’s replacement value;
  • The size and age of your home;
  • Seismic activity strength in your area;
  • The location of your home;
  • The deductible point that you set;

Also, you need to know if the earthquake insurance policy that you purchase covers optional items like demolition costs, damage to possessions inside the home and temporary housing. Whatever coverage limitations may apply to your particular policy will be outlined in its fine print sections. Taking the time to comparison shop between earthquake insurance companies online will save you time, frustration, fuel and money. However, wherever you are and whatever your area’s seismic probability is, you an count on earthquake insurance premiums to be on the steep side.

More information about earthquake insurance:

The majority of San Francisco residents opt not to purchase earthquake insurance. Instead, they choose to gamble that, in the event of quake damages, the total costs associated will be less than the exorbitant deductibles of the policies. All homeowners insurance providers in California are required to offer quake insurance to their customers. It’s definitely a high-risk business, and that’s the reason for the massive deductibles. Still, if you have considerable equity in your home, you may do very well to incur the expenses of the earthquake coverage premiums and add that layer of protection to your investment’s defense.

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