| Basics
information of Earthquake Insurance |
When considering earthquake
insurance you must keep in mind that basic homeowner’s
insurance does NOT cover earthquake damage.
This means that when considering earthquake insurance the
major factor should be the point at which a lack of coverage
will create a financial burden on the homeowner. This equates
to an individual financial decision based on the point where
repairing or rebuilding your home becomes too large a financial
responsibility. You should keep in mind the value of the home
and the probability of an earthquake in your area.
A simple rule to follow is to never risk more than 10% of
your liquid assets. While damages resulting from a minor earthquake
can often be covered without earthquake insurance, the potential
damage that would result from a major earthquake represents
more than 10% of most people’s liquid assets.
Earthquake insurance represents a very unique and specific
coverage. Understanding the details of your earthquake insurance
policy is very important. To help you gain an understanding
of these policies, or for more information on earthquake insurance,
visit our specialist site below.
|
| Who
need earthquake insurance? |
| People living in USA and
specially in California frequently purchase earthquake insurance.
In this area there is a 70 percent chance that a damaging
earthquake with a magnitude of 6.7 or higher on the Richter
scale will strike within the next 30 years. To envision a
6.7 earthquake, take the 1994 Northridge earthquake that killed
57 people and caused over $20 billion in damages for example.
By looking at the simple numbers it is easy to see that people
who wish to protect their possessions and property in any
area where a quake may hit are buying earthquake insurance.
|
| What
cover by earthquake insurance? |
Your earthquake insurance
policy should cover the replacement or repair costs of your
damaged property.
When looking at your specific needs and the coverage options
available, be sure to examine the following:
- Does the earthquake insurance policy cover only the
dwelling or does it incorporate accessory structures as
well?
- Will the earthquake insurance policy cover all the
contents of your home and any additional living expenses
you may incur if your home is destroyed?
|
| How
much earthquake insurance coverage should I buy? |
| Remember when purchasing
earthquake insurance the major factor is that your policy
affords you the ability to rebuild your home and replace damaged
possessions. Also keep in mind the value of your earthquake
insurance coverage should cover the actual costs associated
with replacing or reconstructing your property, not just the
market value of your property and possessions. |
| What
is the cost of earthquake insurance? |
Each insurance company
determines their own rates for earthquake insurance, which
can depending on several key factors. Earthquake insurance
premiums for older homes typically cost more than newer ones,
while the premiums for wooden homes tend to be lower than
brick ones, as wood takes the stress and movement associated
with an earthquake better than brick structures.
Geographic location also plays a role in determining earthquake
insurance rates. Areas of the country are divided into scales
from 1 to 5 in accordance with the likelihood of an earthquake.
Earthquake insurance rates are calculated with this geographical
data in mind. As earthquake insurance represents a type of
catastrophic coverage, most policies carry high deductibles
of anywhere from 10 to 20 percent of the coverage limit.
|
| *The above information was
provided for information purpose only. |
| |
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