Earthquake Insurance

What is Earthquake Insurance?


Earthquake insurance is a form of property insurance that is used to pay the holder in the situation that an earthquake has caused damage to their property. Most of the homeowner policies that are available do not provide any coverage for earthquakes. Within the United States, insurance companies have to stop selling coverage for some weeks after a large earthquake has occurred. This is due to the fact that damaging aftershocks can continue after the quake – if the aftershock is close to an area that is populated, it may cause even more damage.


What Does Earthquake Insurance Cover?


Most of the earthquake insurance policies are able to provide a high deductible, which is very helpful if the entire home is destroyed during the earthquake. However, it’s not useful the home is damaged. Insurance companies have to be careful when they are providing this type of insurance because an earthquake that is strong enough to destroy a house within the area can probably be strong enough to destroy numerous homes within the same region. If a company has insurance policies on a large amount of homes within a city, then there’s a chance that a large earthquake is going to drain all of the resources of the company because the money will go to handling all of the insurance claims.


What Are the Cost Expectations for Earthquake Insurance?


Rates depend on location and the chances of an earthquake. Sometimes the prices are cheaper for homes that are made out of wood. This is because they are able to handle earthquakes better than homes that would be made out of brick. The costs associated with having earthquake insurance are somewhat comparable to homeowner’s insurance, although generally much cheaper. The prices vary depending on your location – if you are in an area that’s more likely to have earthquakes, the rate that you pay for the insurance is generally more expensive. To some extent, it has been said that this has been done to try to dissuade people from investing in earthquake insurance just because they can when it may not be completely necessary – it also helps to protect against a situation where a large amount of homes may get insured and then an earthquake may happen, which would cause issues with a lack of provisions.


What Are the Benefits of Earthquake Insurance?


Homeowners insurance almost never includes coverage for earthquakes. For individuals that live in areas where an earthquake is very likely to be happening, it’s a good idea to have earthquake insurance because it ensures that damages will be covered and paid for if anything happens. These are costs that would generally not be paid for at all when based on homeowner’s insurance. However, there are a lot of states that don’t even offer earthquake insurance because they believe that the earthquakes are unlikely in their area. Benefits of this type of insurance are fairly obvious, but different policies may offer more benefits depending on your state and coverage options. To determine the full range of benefits you will need to speak to your agent.

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