How To Buy Earthquake Insurance

Earthquakes can cause devastating damage, particularly in areas prone to seismic activity like California and Washington. With this in mind, it is essential to be prepared for the worst and buy earthquake insurance. This blog post will discuss the basics of earthquake insurance, what is covered and what is not, and how to find the right policy for you.

Types of Earthquake Insurance

Most homeowners insurance policies do not cover earthquakes—you need a separate policy for that. There are several types of earthquake insurance coverage options available in California:

• The California Earthquake Authority (CEA) – This is a government program set up in 1994 after the Northridge earthquake to provide earthquake policies for residential homes through participating home insurers. To purchase the CEA, you must also purchase home insurance from one of the CEA participating insurance providers. By far, the CEA has the vast majority of earthquake insurance exposure among all the insurers in California.
• Private or Standalone earthquake insurance policies – These types of policies are available from private admitted insurers in California. These standalone insurance policies can be purchased without also buying your home insurance from these companies. So you can purchase a home insurance policy of your choice and a standalone earthquake insurance policy. Surprisingly, these standalone earthquake insurance policies are often at a lower cost and provide much better coverage than the CEA policies.
• Earthquake Endorsement Coverage – These are “mini” policies that can be added to some home insurance policies and provide the bare minimum coverage to the home. These policies can often be more costly than standalone earthquake insurance policies, even though less coverage is afforded.

What Does Earthquake Insurance Cover?

Earthquake insurance typically covers damage caused directly by earthquakes. Additionally, some policies like the CEA excludes certain types of structures, such as pools, decks, fences, and other outbuildings on your property. Review your insurance policy carefully before purchasing earthquake insurance.

Tips For Finding The Right Policy

When shopping for an earthquake insurance policy, there are several factors you should consider to find the best policy for your needs. First, determine how much coverage you need based on the value of your home and its contents. Know what is covered and what isn’t before making a decision (for example, some may include additional living expenses while others may not). Then, decide what type of deductible makes sense for your situation. The deductibles are often higher with these policies than typical homeowners policies, so make sure you understand how much money you will have to pay out-of-pocket if there is an incident before committing to a specific policy or provider.

Conclusion

Earthquake insurance can provide much-needed peace of mind if you live in an area prone to seismic activity, as it can protect you financially should disaster strike. Knowing what types of policies are available, what they cover, and how much they cost can help ensure that you find the right policy for your needs without spending more than necessary on unnecessary features or benefits. Doing research ahead of time can save time when making decisions about purchasing a policy and ultimately help give more control over one’s finances in case disaster strikes down the line!