Earthquake Insurance

Do You Need Earthquake insurance?

For some people, earthquake insurance is a vital part of their overall protection. Typically, earthquake insurance is only offered in areas where earthquakes have been known to occur. Especially in California, residents find that earthquake insurance is often offered as a main policy or as a supplement to property or personal property insurance. According to information from the Insurance Information Institute, located online at www.iii.org/media/hottopics/insurance/earthquake, more people are opting to eliminate earthquake insurance from their policies. The reason, according to the article, is the rising cost of earthquake insurance.

According to information from the Insurance Information Institute, the potential for damage from earthquakes continues to grow because of increased development in areas that are seismically active. While some people simply accept the risk of quakes, not everyone realizes that their property - homes and businesses - are typically not covered by a homeowners or business insurance policy. An additional earthquake insurance policy is needed in order to ensure that damage from an earthquake - including the resulting mudslides and other side effects of a quake - is covered. The Insurance Information Institute estimates that only about 14 percent of homeowners purchase earthquake insurance.

Usually, California is the first state to come to mind when considering areas with an increased risk for earthquakes. However, homeowners in Missouri understand the need for earthquake policies, especially those who live near the New Madrid Fault. The Insurance Information Institute points out that a higher percentage of that state's population has earthquake insurance than California's population, but also points out that the rates in Missouri are much less expensive than rates in California.

Earthquake insurance is only necessary for your home, business and personal property, but not for your vehicle. If you have comprehensive automobile insurance, your vehicle is covered under that policy.

The Consumer Information Guide has a website that includes information about earthquake insurance, specifically for California residents. Located online at www.insurance.ca.gov/CSD/Brochure/Residential/Earthquake.htm, the website offers a discussion about earthquakes and the resulting damage. According to information on this site, homeowners should carefully consider their insurance policy to determine what will or will not be covered in the event of an earthquake. Remember that an earthquake can trigger many secondary responses, including mudslides or floods. Even if your insurance policy covers those events, it might not pay if the flood was triggered by an earthquake or aftershocks. The same may be true if you have pipes that burst or glass that breaks as a result of a quake. Even if your insurance states that broken pipes and glass are covered, it could be excluded if an earthquake caused the event and you don't carry earthquake insurance.