Owning a home is an excellent achievement for any individual, but it comes with a slew of new responsibilities that can quickly become overwhelming—mainly if you are a first-time homeowner. Let’s address an insurance question that has become increasingly common among new homeowners: do I need earthquake insurance? The short answer: maybe. The long answer requires more explanation, so let’s start at the beginning.
Does Homeowners Insurance Cover Earthquakes?
Most homeowners purchase a standard homeowners insurance policy and leave it at that. As far as they are concerned, homeowners policy should cover any issues that arise from their home. Unfortunately, not all homeowners policies are the same, which means different policies cover different things. As it turns out, most standard homeowners policies do not include earthquake coverage, and you must purchase an earthquake coverage endorsement or a separate earthquake policy if you want coverage.
Do I Need Earthquake Insurance?
So, do you need this coverage? It depends on where you live. If you live in California, you need earthquake coverage. However, it may surprise you that many U.S. states other than California are at risk for earthquakes. The U.S. Geological Survey reported that between 2002 and 2012, earthquakes of 4.0 or higher magnitude were reported in 23 different U.S. states. Do your research! Getting earthquake insurance coverage is worth your time if you live in an area prone to earthquakes.
How Much Earthquake Insurance Coverage Do I Need?
The amount of earthquake coverage you need will vary depending on several factors. The most important one to consider when buying a policy is the total cost of rebuilding your home, including materials and labor. In the worst-case scenario, you want to ensure your insurance policy can cover what you need.
It’s also worth taking the time to do a complete inventory of all your belongings. That way, you can more accurately estimate the cost of replacing anything that gets lost in the event of a catastrophic earthquake. Depending on what you have, it could be worth taking the time to have a professional appraiser come in and assess your belongings’ value.
How Much Is Earthquake Insurance?
Yes, earthquake insurance can be expensive. Premiums range from $1,000 to $5,000 annually, depending on the coverage you need. Most earthquake policies also come with high deductibles, meaning you will have to pay a decent amount out of pocket before your coverage kicks in. With that in mind, investing in an earthquake policy may not make sense if you don’t own your home outright. If you do and live in an area that experiences earthquakes, it’s worth the investment. Remember, if you don’t have a policy and lose your home to an earthquake, rebuilding your home and replacing your valuables will have to come out of your pocket.
If you want an earthquake policy or want to assess the state of your current insurance policies, we encourage you to reach out to the staff at TGS Insurance. Our agents are insurance experts and we’ll work to find the right policy for your needs and your budget. Visit our website to learn more!