The focal point of today’s blog is to debunk what exactly Earthquake Insurance is and why it is important for you. Your basic Homeowners Insurance typically protects your dwelling and other structures and its contents from damages. That includes damages due to fire, smoke, lightning, hail, theft and other exposures described in your policy. Earthquake damage however, is typically excluded from homeowners insurance policies. The most common named perils are covered in your homeowners policy, but depending on the type of plan you are on, protection is limited to specific events.
Our agency is located in beautiful Southern California, known for earthquakes, and still one of the biggest objections we get is Earthquake Insurance. A lot of folks, even in our book of insurance, buy the homeowners insurance policy, but often try to neglect earthquake insurance. Why is that? Well, for starters there is a misconception. Some of the biggest objections we get is, “My deductible is to high, its 15%”, or “My coverage A is $400,000 which is approximately $50,000 to $60,000 of a deductible, what good is that?” So, most think it is to expensive, or unnecessary. As an insurance agency our goal is to protect not only you, but your assets. For most people their largest asset is their home. An asset is equity building, assets are there to make you money. Your goal should be to protect your assets. If you are in California, then earthquake insurance should be imperative.
Most Californians live well within 30 miles of an active fault. Government assistance is not always available, and before that you must qualify for a grant. Even with a government loan, it is possible that you wont have enough to rebuild your home. If you don’t have a separate earthquake insurance policy, you will be the one REPAIRING, REBUILDING and REPLACING. Ultimately, YOU pay for 100% of the RECOVERY. Some folks bring up FEMA, the federal system. “Well if there is an earthquake FEMA will take care of it.” Lets say unfortunately your home were to have an earthquake related loss, structurally it’s damaged, and now because you don’t have earthquake insurance you result to FEMA. The truth is if FEMA even gets to you, which you are going to be in line waiting amongst other people. It isn’t free and you have to pay FEMA back for the reconstruction of your house.
We believe earthquake insurance is salient, and we do recommend it. We encourage you to be more informed about earthquake insurance, don’t put it off. We are here to educate you, and again make sure that you, your family, belongings, and assets are protected.