What happens if you have no earthquake insurance?
If an earthquake damages your home and you don’t have earthquake insurance, you’ll most likely end up paying out of pocket to make any necessary repairs. If your property is at high risk for earthquakes, the seller may disclose this in a Natural Hazard Report.
Do the majority of homeowners in California have earthquake insurance?
The entire state is vulnerable to earthquakes, but just 13% of homeowners have earthquake insurance. And to explain why and whether last week’s quakes are changing that, we’re joined by Glenn Pomeroy. He’s CEO of the California Earthquake Authority, a nonprofit that sells earthquake insurance plans.
How do you know if you need earthquake insurance?
Suffice it to say, if there’s anywhere homeowners should carry earthquake insurance, it’s in California. If you live within 30 miles of an active fault (you can check for that here), you should consider insuring your home against earthquake damage.
What happens if your house is destroyed by an earthquake?
Earthquake insurance usually pays for damage to the structure, temporary living expenses and personal property replacement. But you may still have hardship because of the deductible, and because payment might not come immediately. … So if an earthquake destroys your home, you still have a mortgage obligation.
Does house insurance cover earthquake damage?
Standard home insurance does not usually include terms of coverage in the event that an earthquake causes damage to property. … It becomes a must if you reside in an area with a high quake risk. Homeowners may check their current insurer if additional provisions in their insurance policy could cover earthquake damage.
What percentage of Californians have earthquake insurance?
Only 10 percent of California residents have earthquake insurance. Are you one of them? The reality is the traditional homeowners insurance policy doesn’t cover earthquake damages. The common perception about quake insurance is that it is too expensive and complicated to be deemed necessary for California residents.
Why is earthquake insurance deductible so high?
The explanations for the high cost of quake insurance relative to other insurance include: – Big earthquakes do not happen often, so there is less information available to use in predicting the cost of repairing the damage.
Is earthquake insurance tax deductible?
Earthquake insurance generally comes with a deductible of 15% of the home’s value, according to John Rundle, a professor of physics at the University of California, Davis.
Why insurance companies usually do not offer earthquake insurance?
Insurers do not want to sell earthquake policies but do want to sell lucrative homeowners’ and auto policies. So they offer earthquake insurance to homeowners to keep them as customers. … Insurers are also concerned that if they refuse to sell earthquake insurance, state regulators may force them to.
How much more is earthquake insurance?
Also keep in mind that earthquake insurance usually has a higher deductible than other kinds of insurance—generally ranging from 2% to 20% of the damage. On a $400,000 home, your deductible would be $8,000 at 2%, but this rises to a whopping $80,000 at 20%.
What is the best deductible for earthquake insurance?
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The deductible for earthquake insurance is usually 10%–20% of the coverage limit. For example, if your home is insured for $200,000 a 10% deductible would be $20,000.