Here’s a breakdown of the typical coverages included in an earthquake insurance policy:
For Homeowners:
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Dwelling Coverage: The most essential part of earthquake insurance. It covers the cost of repairing or rebuilding your home’s structure if damaged by an earthquake, including:
- Walls, floors, and roof
- Foundation (which can be particularly expensive to repair following an earthquake)
- Attached structures like garages or decks
-
Personal Property Coverage: Protects your belongings from loss or damage caused by an earthquake. This includes:
- Furniture
- Electronics and appliances
- Clothing
- Decor and artwork
-
Additional Living Expenses (ALE): If your home becomes uninhabitable due to earthquake damage, this coverage helps pay for temporary housing, food, and other necessary living expenses while repairs are underway.
For Renters:
- Personal Property Coverage: Protects your belongings if they are damaged or destroyed in an earthquake.
- Additional Living Expenses (ALE): Covers temporary relocation costs if your rental unit becomes uninhabitable after an earthquake.
Important Things to Know:
- Separate Policy or Endorsement: Earthquake insurance is usually purchased separately or as an add-on (endorsement) to your standard homeowners or renters insurance policy.
- High Deductibles: Earthquake insurance often has a percentage-based deductible (eg. 10-15% of your dwelling coverage), rather than a fixed dollar amount.
- Exclusions: Policies may have exclusions for damage caused by related events like fire following an earthquake, landslides, or tsunamis.
Why You Might Need It:
- Significant Financial Risk: Repairing earthquake damage is extremely expensive. Without insurance, you could face financial ruin if your home is severely damaged.
- Not Covered by Standard Policies: Homeowners and renters insurance policies do NOT cover earthquake damage.
- Peace of Mind: If you live in an earthquake-prone area, earthquake insurance provides critical financial protection in case of a disaster.