Although they are few and far between, there are insurance providers who do sell earthquake insurance to homeowners. Such coverage is not part of a standard home insurance package and is expensive. However, if you live in an area that is prone to earthquakes having such an insurance policy in place will give you financial protection if you sustain any damage when one does occur.
The first thing you have to do is to conduct a full inspection of your home to see how well it would stand up in an earthquake. Retrofitting your home according to insurance standards will go a long way in reducing your risk and that of the insurance provider and will therefore help to reduce the cost of such insurance. If you are building a new home, you should make sure it is built to basic seismic safety standards and if it is an older home, the cost of undertaking such renovations is not that high. These include such things as bracing the foundation of your home and your water heater.
You can save money by purchasing earthquake insurance for your home through the same company that holds your standard home insurance. If your present insurance provider does not offer this option, you should spend some time searching out the companies that do. One of the key things you do have to research is the financial stability of the company and its associates. When you take out several insurance policies with one provider, such as home insurance, earthquake insurance and auto insurance, you will automatically qualify for a discount and this will lower your costs.
Another option in buying earthquake insurance is to purchase this from another company so that you have a policy that is completely separate from your home insurance policy. The rates for deductibles on this type of insurance are high, but you will have options in the amount of deductible you choose. Take a look at the cost of replacing your home and determine how much you can afford to spend if the home does get destroyed in an earthquake. It is very likely that the cost of the premiums is far lower, even over the long term, than this replacement cost would be. In deciding how much deductible to choose for your policy, consider what you may be able to pay on your own. The higher the deductible you choose, the lower the premiums will be as well.
The deductible in earthquake insurance is different from the deductible on standard home insurance policies. It does not have a specific dollar amount attached to it. Instead it is a percentage of the value of your home and the policy will not pay out until this amount has been met. If your home is worth $300,000 and the standard deductible is 15%, then you won’t collect any money from your earthquake insurance until the cost of the damages exceeds $45,000 and it will only pay for the repairs over this amount. This means you will be responsible for paying the first $45,000.
The cost of the premiums is not the only factor you have to consider when you take out an earthquake insurance policy, but even with the high deductible, at least you will have insurance to fall back on.