Earthquake Insurance Policies
Insurance is one financial product that you hope you will never need, but you should be caught without it. This includes insurance for your home, but many homeowners do not realize that their base policy does not actually include coverage for earthquakes. In the event of one of these natural disasters, homeowners without earthquake insurance could be looking at a total loss of property with no financial help in sight.
Am I Covered?
Almost all homeowner insurance policies do not include coverage for earthquakes unless it is specifically added on. Even those that live in locations such as California that are known for earthquakes will not have this form of coverage automatically added to their policy. The same can be said for businesses that are typically not covered for most natural disasters unless they specifically add it to their policy. No matter where one lives or works, however, it is important to weigh the benefits versus the risks of having insurance coverage for natural disasters that are likely to happen.
Determining Your Coverage
Homeowners are going to have quite a few choices to make when it comes to being covered for an earthquake. First, they will need to set a deductible either by a percentage of the damage or a set dollar amount. If an earthquake does take place, this is the amount that they will be personally responsible for before the coverage kicks in. For most situations, this begins at around 15 percent of the total damage, but this can be altered as much as one would like. Owners will also need to set a dollar amount for the cost of replacing their possessions within the home.
Due to the nature of earthquakes, there may be exclusions for the policy that must be added if you would like coverage. More valuable items such as jewelry, furs, and firearms will only be covered to a pre-determined limit. After that, the items may be considered a collection and will need their own rider. Other things that are not typically covered by a basic earthquake policy include landscaping, fences, and structures not connected to your home.
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