For many property owners, earthquakes are a significant threat. You may not feel they are going to cause your building to fall, but they can cause significant structural damage even if the earthquake itself is not a large one. Earthquake insurance can safeguard your investments in cases like this, but knowing what to buy and how to do so can be a challenge to even someone that's owned a home in an earthquake zone.
Do You Need Earthquake Insurance?
Most homes with a mortgage require home insurance, but not necessarily earthquake coverage. It's important to know if your policy will cover damage from an earthquake or if you need to purchase a secondary policy that does. In high-risk zones, you'll need a separate policy since your basic home insurance plan doesn't extend to earthquake damage.
What Should Earthquake Insurance Cover?
Earthquakes can cause a home to fall, but they can also lead to other risks, such as a flood from a ruptured water line or a gas leak that leads to a fire. That's why you'll need extensive coverage. It should take into consideration these three components:
- The dwelling coverage will provide for protection of the structure and your other structures, including for repairs made as a result of the earthquake.
- Personal property coverage should provide for coverage for your belongings, up to a set limit. This covers the contents of your home if they are damaged or lost due to an earthquake.
- Additional living expenses or loss of use coverage goes further. It helps to pay for your hotel or rental costs if you are displaced as a result of an earthquake.
Finding the right amount of coverage can be somewhat difficult for many people. In short, focus on ensuring the policy covers the value of the building to rebuild it, in most cases, as well as the value of your contents (usually policies are available up to $100,000). A good policy also covers expenses related to moving out until repairs can happen (these policies often can extend up to $25,000). Work closely with your insurance agent to get the right level and amount of coverage.
Protect your home from the elements. Call JSW Insurance at (925) 737-1560 for more information on Bay area earthquake insurance.