086: Earthquake Insurance

Quake insurance is typically not part of the standard homeowner's policy. Many of you might think that California is the only place you need to think about this type of coverage. It’s not. Actually, majority of residents in this state don’t buy this coverage.

Let’s discuss some facts that you need to know about Earthquake insurance:

  1. Deductible - it’s typically 10% to 15% of your overall limit. If you home is worth $500,000, be prepared to come up with $50,000 out of pocket.
  2. Personal property - has a small amount of coverage such as $5,000, because you personal property such as furniture is less likely to be destroyed in the quake. If you need more coverage, you can increase it.
  3. Exclusions - no coverage for the loss of landscaping, pools, fences, and separate structures (including garages) -- and is likely to exclude claims for broken chandeliers, crystal and china
  4. Cost of coverage - It’s expensive. East coast & Midwest can be 50 cents per $1000 and West coast as high as $15 per $1000 of coverage.

So, it comes down to deciding, if believe earthquakes are frequent events in your area and how much out of pocket cost you can handle.

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