Earthquakes Insurance

Since 2005, earthquakes powerful enough to be felt by people have occurred in 40 of the 50 states, according to the United States Geological Survey. Not surprisingly, Alaska, California, and Hawaii lead the nation in frequency and size of earthquakes, but other states have significant numbers of quakes as well. For example, New York had 25 perceptible earthquakes from 2005 to 2007. Maine had 12, and Tennessee had 10. From Florida (2) to Washington (18), America is earthquake country. (earthquake insurance).

According to the Federal Emergency Management Agency (FEMA), earthquakes are responsible for $4.4 billion worth of property losses each year, fourth among leading causes behind fires ($8.6 billion in losses), hurricanes ($5.4 billion in losses), and floods ($5.2 billion in losses). Insuring against earthquake losses is tricky. Here are five things you should know:

Standard homeowner insurance does not cover structural damage caused by an earthquake's shaking. The violent shaking of an earthquake can seriously damage any building, including a home. Structures made of brick and stone, such as walls, fireplaces, and chimneys do not have the flexibility to bend very far without cracking or even collapsing. That same goes for tile work. As a result, floors, bathroom walls, and kitchen backsplashes are especially vulnerable to shaking damage. Many homes, particularly in the western United States, are built on concrete slabs that can crack as the ground moves in waves beneath them. Concrete foundations also can develop fissures, compromising their integrity. If the damage is severe enough, the home could be condemned and, in severe cases, torn down. Structural damage caused by an earthquake is not covered by a standard homeowners insurance policy.

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Each year, more homeowners get rid of earthquake insurance than buy it because, according to consumer groups, they believe the policies cost too much and cover too little.

Should you buy earthquake insurance?
- No place in California is immune to earthquakes and earthquake damage, and the Bay Area is certainly no exception.
- Also, be aware that damage from an earthquake is not covered by a standard homeowner policy.
- Determine your risk for damage resulting after an earthquake.
- Make a decision - will you purchase earthquake insurance, self insure, or retrofit your home to minimize potential damage? Or will it be a combination of two or three items?
- Can you afford to replace your personal belongings without insurance? If not, you may want to consider earthquake insurance.
- If your home is destroyed following an earthquake, can you afford to live in temporary housing until you can move back into your home?
- Do you have a mortgage? If you do, can you afford to pay the mortgage while at the same time paying to repair or replace your home?
Source: California Earthquake Authority; Insurance Information Network of California.

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