Earthquake Insurance

The Seismic Safety Zone

Earthquake Insurance

Earthquake insurance will most likely always be a hot topic of debate, however, when you consider the purchase of this coverage is just another way to insulate yourself from losing the single greatest asset you own, the annual cost may not seem as prohibitive when you look at all of the options.

One matter that separates federal aid to assist you after an earthquake is the very much needed declaration from the President. If the damage in your area is not that great, a disaster may not be declared and federal moneys will not be available.

A frequent issue surrounding earthquake insurance is the high deductible. However, if you have a home that has considerable damage, finding funding to cover your deductible is far better than trying to find funding for an entire house. After the Loma Prieta earthquake, the Federal Emergency Management Agency (FEMA) stepped in to help homeowners, but they had a limit and that was $100,000. The question then becomes, can you qualify for a loan with FEMA and still be able to pay your current mortgage? If you don't qualify, you cannot receive assistance. Should your home be destroyed you can purchase another home if you qualify for a FEMA loan, but the kind of home you will live in most likely will be far less than what you current have.

In California we have two choices. 1. Purchase a limited catastrophic policy from the California Earthquake Authority. It pays for damage to the home, allows $5,000 coverage for personal effects and $1,500 for loss of use. The smallest deductible available is 15%. The deductible is 15% of the amount of your home policy, not 15% of the loss itself. 2. You can still purchase a full earthquake insurance policy, with coverage's that match your current homeowners policy, item for item. Some of them are available with a 10% deductible. The premium is usually higher than the limited plan, however, the coverage is 100% closer to your true needs.

Who needs to purchase this coverage? Everyone, for the following reasons:

The Elderly: If they lose their home, the investment that might take care of them in their last years would be lost.

New Homeowners: They have little financial investment in the home, but if they lost it, chances are they might never be able to own a home again. Their nest egg investment would be lost.

Middle Aged Homeowners: They have a sizable cash equity in the home, they don't want to start all over again and are much closer to paying off their mortgage.

Renters: Though the loss is limited to their personal property, that is all they have and without coverage, they could not replace what they own for a long time.

Earthquake insurance is a wise investment, because if you only used it once in a lifetime the benefits would be well beyond the premiums paid for the coverage.


	The Seismic Safety Zone Earthquake Insurance Earthquake insurance will most likely always be a hot topic of debate, however, when you consider the purchase of this coverage is just another way to insulate yourself from losing the single greatest asset you own, the annual cost may not seem as prohibitive when you look at all of the options. One matter that separates federal aid to assist you after an earthquake is the very much needed declaration from the President. If the damage in your area is not that great, a disaster may not be declared and federal moneys will not be available. A frequent issue surrounding earthquake insurance is the high deductible. However, if you have a home that has considerable damage, finding funding to cover your deductible is far better than trying to find funding for an entire house. After the Loma Prieta earthquake, the Federal Emergency Management Agency (FEMA) stepped in to help homeowners, but they had a limit and that was $100,000. The question then becomes, can you qualify for a loan with FEMA and still be able to pay your current mortgage? If you don't qualify, you cannot receive assistance. Should your home be destroyed you can purchase another home if you qualify for a FEMA loan, but the kind of home you will live in most likely will be far less than what you current have. In California we have two choices. 1. Purchase a limited catastrophic policy from the California Earthquake Authority. It pays for damage to the home, allows $5,000 coverage for personal effects and $1,500 for loss of use. The smallest deductible available is 15%. The deductible is 15% of the amount of your home policy, not 15% of the loss itself. 2. You can still purchase a full earthquake insurance policy, with coverage's that match your current homeowners policy, item for item. Some of them are available with a 10% deductible. The premium is usually higher than the limited plan, however, the coverage is 100% closer to your true needs. Who needs to purchase this coverage? Everyone, for the following reasons: The Elderly: If they lose their home, the investment that might take care of them in their last years would be lost. New Homeowners: They have little financial investment in the home, but if they lost it, chances are they might never be able to own a home again. Their nest egg investment would be lost. Middle Aged Homeowners: They have a sizable cash equity in the home, they don't want to start all over again and are much closer to paying off their mortgage. Renters: Though the loss is limited to their personal property, that is all they have and without coverage, they could not replace what they own for a long time. Earthquake insurance is a wise investment, because if you only used it once in a lifetime the benefits would be well beyond the premiums paid for the coverage. \| home \| Hazard Awareness \| Don's Corner \| Feature Of The Month - Loma Prieta Quake \| Fault Of The Month \| Useful Links \| Earthquake Prediction \| Home Retrofitting \| Earthquake Insurance \| Poem Of The Month \| Field Trip Story \| Professional Insurance Services