Earthquake Insurance Policies
Many people may not realize their homeowners insurance does not include earthquake insurance. While it may not seem necessary, depending upon geographic location, earthquake protection may be a vital part of your policy.
The United States Geological Survey reports that earthquakes threaten more than 75 million Americans in more than 39 states. The risk goes beyond just those located in California and the surrounding areas; in recent years, quakes have been felt all across the country, acting as a wake-up call to those lacking the proper insurance.
Earthquake protection policies help to cover damages caused to a home on part of an earthquake. The Napa quake in 2014 caused more than 1 billion dollars worth of damage, and it was just a 6.0 on the Richter scale. Much of the damage was caused inside the home; personal property and valuables that were irreversibly damaged as a result. Priceless vases, family heirlooms, and more were tumbled from their positions and shattered on the ground. Unfortunately, most insurance policies do not cover these items.
Earthquake insurance is a disaster-coverage policy, which means that it isn't intended to be used often. However, with predictions for the "Big One" coming in the next fifty years, it is designed to cover a catastrophic event, resulting in higher deductibles and premiums.
The amount the policy covers should be enough to rebuild the home and replace its valuables in a post-disaster market, in which the price of supplies and materials will be higher. A good estimate is to take the value of your home and its contents plus 20%; that should provide adequate coverage should the worst happen.
Earthquake protection policies are an addition to standard homeowners insurance, but offer the benefits of providing the necessary funds to replace the home in the event of a major quake. Since standard insurance policies do not provide this specialized protection, quake protection is well worth it.
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