Earthquake Insurance

Earthquake Insurance Information

The Basics of Earthquake Insurance

Earthquake Insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if the entire home is destroyed, but not useful if the home is merely damaged. Rates depend on location and the probability of an earthquake loss. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick.

Why Is Earthquake Insurance Important?

For those of us that live along the Wasatch Front, we have been warned about the possibility of a large earthquake for years. The most important thing for people to understand is that Earthquake Coverage is NOT included in a standard homeowners policy. What this means is that if your home is completely destroyed by an earthquake, your standard homeowners policy may not provide adequate coverage to replace it. Since many people consider their home to be their single largest investment, make sure to thoroughly review your homeowners policy with your agent and see if an earthquake policy makes sense for you.

What to Discuss With Your Agent

Before buying earthquake insurance, be prepared to discuss the following with your independent insurance agent:

• The value of your home and belongings in order to determine coverage limits.
• The coverage that exists in your current homeowners policy.
• Deductibles that will apply before earthquake insurance pays a claim.
• The procedure of filing a claim.
• The insurance provider’s reputation for customer service and ability to pay claims.