Do I Need Earthquake Insurance for My Home?
Earthquake insurance provides financial coverage for damage that earthquakes can cause to your property. Do you really need it for your home?
Earthquakes are relatively unpredictable, and if you’re buying a home in an area that experiences earthquakes, you’ll want to seriously consider protecting one of your most important investments.
One of the best ways to mitigate the damage and destruction that earthquakes can cause to your home is by purchasing an earthquake insurance policy.
What is Earthquake Insurance?
Unlike your standard homeowner's insurance policy, earthquake insurance is an additional, specific type of insurance policy that provides coverage if your home incurs damage or becomes destroyed due to an earthquake.
What Does Earthquake Insurance Provide?
Earthquake insurance covers any damage or destruction of your home caused by an earthquake, including damage or destruction caused by aftershocks.
Earthquake insurance also covers belongings in your home that are damaged or destroyed by an earthquake, and also covers damage or destruction to additional buildings on your property (such as a guest house).
If your home is rendered uninhabitable by an earthquake, earthquake insurance can provide financial coverage for temporary living arrangements until your home is repaired.
Should I Invest in Earthquake Insurance?
Earthquakes can be scary for countless reasons. But you can empower yourself with knowledge about your home, local area, and what earthquake insurance offers to decide on whether or not to invest in it one less thing to stress about.
Here are five key factors to consider when making this decision:
#1. Your Current Home Insurance Coverage
You may be surprised, but like flood insurance, most home insurance policies do not automatically provide earthquake coverage in a homeowner’s policy.
#2. Your Local Area
If you live in an earthquake-prone area, earthquake insurance is likely the right investment to protect your property.
You’ll want to consider the frequency of earthquakes, as well as your home’s proximity to fault lines, or the cracks in the earth where earthquakes originate. This information can easily be found through geological maps online, or by working with your trusted real estate agent.
#3. The Age and Structure of Your Home
It’s critical to note that a home built to withstand an earthquake does not guarantee that it will not sustain damage from an earthquake.
If you own a newer home, it is likely to be built with protection against earthquakes. Because of past earthquakes, many building codes have been enacted strictly for constructing new homes.
If you own an older home, it may need to undergo seismic retrofitting, which entails reinforcing the home from a foundational perspective, strengthening its ability to withstand earthquake shaking.
#4. Your Financial Standing
When considering the purchase of earthquake insurance, there are essential questions to ask yourself. If an earthquake struck tomorrow, would you have the funds to rebuild your home, purchase a new home, or cover living expenses until your home is prepared? If an earthquake destroyed your personal property inside of your home, could you easily replace it all?
If you answered no to any of these questions, you will want to consider investing in earthquake insurance.
After an earthquake, there’s a risk for aftershocks to occur. Aftershocks are the subsequent earthquakes that occur after the initial earthquake. Because aftershocks are essentially additional earthquakes, they have a high potential to cause additional damage to your property.
This is important to remember, as most insurance companies that offer earthquake insurance will not sell coverage for damage caused by aftershocks. As such, this is a key consideration in investing in earthquake insurance before an earthquake occurs.
Your Trusted Real Estate Agent Can Help
If you’re moving to a new area altogether, or you’re unsure of how earthquake-prone your home is, you can contact your trusted real estate agent. Not only are agents in your market experts in all things buying and selling, they’re also able to identify–or direct you to resources to identify–potential social and environmental risk factors for homes in your neighborhood.
And, if you’re unsure about details of your home’s construction, you can work with your real estate agent to review the blueprints of the property. They can also work with you to obtain and review any relevant property history, such as prior earthquakes and any damage, any retrofitting that did or did not occur, and whether or not your home was built with factors to strengthen it against earthquakes.
Ready to work hand-in-hand with top agents in your area for home buying and beyond? Get in touch with them here.