Should you have earthquake insurance in California?
Though California has nearly 16,000 known earthquake faults, you are not required by state law to carry earthquake insurance. Your basic homeowners and renters insurance policies do not cover earthquake damage.
How common is earthquake insurance in California?
In California, for example, just 10\% of homeowners are insured against earthquake damage, according to the California Earthquake Authority (CEA), the country’s largest provider of earthquake insurance.
Does California homeowners cover earthquakes?
Earthquakes Are a Fact of Life in California Homeowners, renters, and condominium insurance policies do not cover damage from natural disasters such as earthquakes, floods, and landslides. Earthquake insurance can help pay for some of your losses.
Is earthquake insurance really needed?
Earthquake insurance isn’t mandatory, but depending on where you live, your home might be at risk of suffering irreparable damage. California law requires homeowners insurance companies to offer add-on earthquake coverage, but there’s no law forcing anyone to actually purchase a policy.
Why is earthquake insurance deductible so high?
Earthquake deductibles are high because the damage from them tends to be catastrophic, making them a higher risk for insurers. To cover costs, they need to make deductibles high.
What is the deductible on California earthquake insurance?
Earthquake insurance generally comes with a deductible of 15\% of the home’s value, according to John Rundle, a professor of physics at the University of California, Davis. “Most homeowners will never exceed the deductible even if they do get damage,” he said.
Does homeowner’s insurance cover earthquake damage?
Homeowners and renters insurance does not cover earthquake damage. A standard policy will, however, generally cover losses from fire following a quake and, if such a fire makes your home unlivable, cover the additional living expenses incurred while you live elsewhere during repairs.
Why insurance companies usually do not offer earthquake insurance?
In the United States, insurance companies stop selling coverage for a few weeks after a sizeable earthquake has occurred. This is because damaging aftershocks can occur after the initial quake, and rarely, it may be foreshock. Although aftershocks are smaller in magnitude, they deviate from the original epicenter.
Do lenders require earthquake insurance?
In most cases, lenders don’t require earthquake insurance as they do homeowner’s insurance. That doesn’t mean you shouldn’t have it, though. According to the National Association of Insurance Commissioners (NAIC), nearly half of Americans are at risk for damage from an earthquake.
What is the best deductible for earthquake insurance?
TOP THINGS TO CONSIDER The deductible for earthquake insurance is usually 10\%–20\% of the coverage limit. For example, if your home is insured for $200,000 a 10\% deductible would be $20,000.
Why are earthquake deductibles so high?
Is earthquake damage covered by insurance?
Earthquakes and coverage Homeowners and renters insurance does not cover earthquake damage. A standard policy will, however, generally cover losses from fire following a quake and, if such a fire makes your home unlivable, cover the additional living expenses incurred while you live elsewhere during repairs.
How much does earthquake insurance cost in California?
The cost of earthquake insurance will depend on the geographical area, the age of your home, the number of stories in your home, the soil type, the deductible you choose, the company and if you choose to add premiums. The average price is about $2,000 to $5,000 per year for the average 1,600 square foot…
Should I get earthquake insurance California?
The state of California offers earthquake insurance through the California Earthquake Authority (CEA). Individual insurance companies in the state can elect to participate in the CEA. By law, if an insurance company offers homeowner’s insurance in the state of California, it must also offer earthquake insurance.
Should you buy earthquake insurance?
If you are located in a high risk earthquake zone, you may be required to purchase earthquake insurance. This is not required at the state or federal level. However, the requirement often comes from your investors or lenders. For example, your mortgage lender may require you purchase an earthquake line of coverage.
Is earthquake insurance worth the cost?
Whether earthquake insurance is worth it for you will depend on your situation. It can be a trade-off because the coverage can be very valuable if you live in an earthquake-prone area, but the cost is very high. Sometimes the deductible can exceed the amount you are claiming for your loss.
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