Understanding The Intricacies Of Insurance

The Fundamentals Of Earthquake Insurance Coverage

Whether you're buying a home in an area that's already prone to earthquakes or you're seeing the increased spread of earthquakes and tremors in areas with mining and fracking, you may be wondering if your homeowner's insurance protects against damage from an earthquake. Like flooding damage, most homeowner's insurance policies exclude earthquake damage from the covered losses. You'll need a separate policy for earthquake damage protection. Here's a look at what you need to know about earthquake damage insurance.

Understand The Coverage Declaration

The first thing that you need to consider when you're opting for earthquake insurance is the actual coverage declarations of the policy. Every earthquake policy is going to have its own clearly defined policy limitations and coverage limits.

Your home will be insured for the replacement value, which means the cost of rebuilding the structure as it was. This usually includes structural damage from the earthquake, as well as any damage to the wiring, heating system, and other built-in appliances.

It will not, however, typically cover damage from a flood caused by that earthquake. Instead, you'll need to have separate flood insurance to cover any of that damage. So, it's important that you understand the declarations so that you can obtain any necessary additional coverage.

Know The Earthquake Risk Zone

One of the things that will directly affect the cost of your earthquake insurance is the risk zone that you're in. If your home is in a higher risk zone for the occurrence of earthquakes, you'll be deemed a higher risk for suffering a loss, and you may pay higher premiums than someone in a lower-risk area. It's important that you talk with your insurance agent about the risk zones so that you can get some idea of how that will affect your premiums.

Consider Your Insurance Source

In some states, you can get earthquake insurance from your homeowner's insurance carrier. It's typically offered as a rider, or an addition, to your existing homeowner's insurance policy. In other states, you may have to obtain your earthquake insurance from a specific carrier. Some states that are more prone to earthquakes have exclusive carriers that offer earthquake insurance, and you may find that those providers have the best rates. 

These are some of the things that you should think about when it comes to protecting yourself from financial losses after an earthquake. Even if your area isn't prone to them right now, it never hurts to be prepared since the unexpected can happen with no warning.

For more information reach out to an insurance provider like Bear River Insurance.