The 1994 Northridge earthquake was one of the costliest natural disasters in U.S history and it almost wiped out one of the nation’s largest insurance companies. It also served as a wakeup call for the state of California, as shortly thereafter insurers that sell residential policies were required to also offer earthquake insurance.
You may be asking why you would need special earthquake insurance. Doesn’t your homeowners policy provide protection if your home is damaged by an earthquake? The short answer is … probably not.
Most homeowners insurance policies do not cover earthquakes. So, if you live in an earthquake zone you should consider buying an earthquake policy. And if you’re thinking earthquakes only occur in California … think again.
California definitely tops the list of earthquake danger zones, but it’s not the only area of risk. The entire West Coast of the United States sits atop a subduction zone where the giant Pacific tectonic plate dives under several North American plates. This creates a lot of stress in the complex series of faults and fractures and makes this entire area prone to earthquakes.
And let’s not forget Washington D.C. Our nation’s capital suffered an earthquake several years ago that severely damaged the Washington Monument and forced its closure for several years while it was repaired.
So, even if you don’t live in the Golden State, earthquakes may still pose a risk to your home. If you are a renter or homeowner in California, Oklahoma, Texas, Illinois, or any other earthquake-prone state, here are six reasons why you should consider buying earthquake insurance.
- Your current homeowners or renters insurance policy does not cover everything. Structural damages and broken personal property resulting from an earthquake are most likely not covered by your homeowners or renter policies. You’ll need to purchase additional coverage to protect it from earthquakes.
- Earthquake insurance may not be as expensive as you think. The assumption is that earthquake insurance is cost prohibitive, but that is not always the case. There are a number of different factors that influence the price and you should talk to your insurance agent to learn more about the many available options.
- It’s easy to get. You don’t have to jump through a bunch of hoops to buy earthquake insurance. With the help of an insurance agent it’s quite simple. If you already have homeowners insurance your agent can provide you a quote and get you signed up right away.
- Federal and state governments can only help so much. If the President officially declares a disaster, FEMA will help in an evacuation or recovery effort. This may also provide access to disaster aid funds, however, there are no guarantees that you’ll be eligible and this money is often difficult to get.
- Your home might be on or near a fault line. It seems like the type of useful information a realtor needs to tell you, but the truth is that homes are sometimes sold without disclosing potential environmental dangers. This is against the law in many states, but it does happen so you should ask specific questions, like whether or not there is an earthquake fault nearby. Sometimes, however, faults are completely unknown. This was the case with the Northridge earthquake, as this 6.7 temblor occurred on an undocumented fault. If you are buying a house in California, you can check fault lines at: California Earthquake Authority.
- One thing is certain … there will be more earthquakes in the future. California has it all … great weather, lots to do, and earthquakes. In fact, there is a 99 percent chance that within the next 30 years there will be a 6.7 or greater earthquake, according to the California Earthquake Authority. But California isn’t alone, because earthquakes have occurred in just about every state, including Oklahoma, Kansas, Illinois, Nevada and Texas.