How does Earthquake Insurance work?

When you think of the things that can damage your home like fire, wind, water, flood and earthquake, you are making a list of “perils”.  At least that is how they are described in your Homeowner’s Insurance policy.  Most Homeowner’s policies are “open peril” or “all risk” policies, but even those names are tricky.  For example, both flood and earthquake are perils that are specifically excluded from coverage on your “all risk” policy.  As we’ve discussed in this space – you can buy back both flood and earthquake insurance in California, within the guidelines of both programs.
Earthquake Insurance – what’s in it?
If you add Earthquake Insurance back to your homeowner’s policy, the coverage looks different from the rest of your policy.  For example, if you have a loss due to a tree falling onto your roof and there is $15,000 of damage, your carrier would pay the claim, less the $1,000 deductible.  If an earthquake knocks your house over and the claim is for $400,000, and you have $400,000 of coverage with a 15% deductible, then the claim will be paid in full – less your 15% ($60,000) deductible. 
That may sound bad, but think about it this way – at this moment in April of 2010, you will likely be the only person on your street who has any coverage, so finding a contractor who will work within the coverage limits will be easier for you than anyone. 
Earthquake Insurance, Flood Insurance and even the every-day Homeowner’s Insurance can be difficult to understand, let alone make you feel comfortable that you are getting a good deal.  Call us today at (800) 681-2025 and let us walk you through what is covered on your policy – and we’ll get you the best deal, too.
Purves Insurance is located in Davis, CA and loves to help you solve the insurance mysteries.