It is important to take into consideration how likely natural disasters, and which types, are to happen when purchasing different types of insurance, such as earthquake insurance. For people living in California, which resides primarily over the San Andreas fault line, earthquake insurance is a sound investment that can put many people’s minds at ease. Although San Andreas fault is a transform fault in which no plates dive under or over one another, the plates glide past each other which can still result in earthquakes without the consequence of magma rising to the surface, causing volcanoes. Despite how frequently earthquakes occur in California, it is not state law to have a policy regarding earthquakes and is left up to the discretion of the policyholder. If you have homeowners insurance, an earthquake policy should have been offered to you as part of their plan. This is true even if your property does not meet current Building Code and Health and Safety Code, but it is possible to be charged a higher premium or deductible, or both.
Although earthquake insurance is helpful in putting shelter back over your head and replacing some items damaged, this does not mean that every policy will cover all of your belongings that may be lost to a natural disaster. That is why it is important to review your policy, premiums and deductibles to see if your policy has the best coverage for your needs. Most earthquake insurance policies cannot be purchased stand alone, they are usually purchased from general insurance companies. The main facets that earthquake insurance covers are: dwelling coverage (shelter excluding landscaping, pools, fences, masonry, etc), personal property coverage (referred to as Coverage C and covers things you own), and additional living expenses or loss of use (limits falling around $1,500 to $100,000). To make earthquake insurance less expensive, “retrofitting”, or making additions to your house to make it safer, can often help lower the cost of premiums and deductibles.