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Earthquake insurance

Nearly all earthquake damage isn’t covered by homeowners insurance. Earthquake insurance is a type of special property insurance that you purchase to cover your home and belongings in the event of an earthquake. The amount of your premium payment depends on where the insured property is situated and how often earthquakes occur in that area. Earthquake coverage can be added onto an existing property insurance policy, or it can be purchased separately. It’s even available for renters.

What does this type of insurance cover?
Earthquake insurance generally provides three different types of coverage. Those are:

• Your home or insured dwelling
• Your personal property inside of your home
• Additional living expenses that you might incur

With an earthquake policy, the home and personal property insurance each have their own deductible. Depending on your insurer, there might be a third deductible for the additional living expenses coverage.

The claim process
Earthquake coverage is usually sold at the same amount of coverage as the value of your home. If a claim is made, a deductible of between 10 and 20 percent of the homeowner’s coverage policy limit is paid by the homeowner. For example, on a claim of $100,000 of earthquake damage with a 20 percent deductible, the homeowner pays $20,000 while the earthquake insurer pays $80,000. Since regular homeowners insurance won’t pay on earthquake claims, the homeowner would need to pay the full $100,000.

Frame homes tend to withstand an earthquake better than brick homes. If there’s visible damage to your home, you should notify your insurer right away. If there’s no visible damage, you should at least have your home inspected.

You might not want coverage if you live in Wisconsin or Minnesota. You’ll probably want it if you live anywhere on or near the west coast, Hawaii or the New Madrid Seismic Area. Since earthquakes aren’t seasonal, there’s no way of predicting them with any degree of certainty. If you live in any of the riskier areas, you’ll want to maintain earthquake coverage 365 days a year.