An Introduction to Earthquake Insurance [For First-time Homebuyers]

Earthquakes may not be the central topic in the recently held United Nations UN Climate Change Summit 2019 in New York City but it is going to be one of the biggest threats to real estate property in the next few years. According to a report by TIME magazine, as of now, there are 16 earthquake-prone states in the United States.

Here are the earthquake-prone states listed in the TIME magazine: Alaska, Arkansas, California, Hawaii, Idaho, Illinois, Kentucky, Missouri, Montana, Nevada, Oregon, South Carolina, Tennessee, Utah, Washington, and Wyoming.

It is estimated that these states are going to experience a significant earthquake in the next 50 years. So, if you own a home in one of these states or are planning to buy one, make sure you have Earthquake Insurance to cover you in difficult times.

What does Earthquake Insurance cover?

1) Covers repairs needed as a result of damage

Earthquake Insurance covers the expenses needed to repair and resurrect your damaged home. An earthquake not only causes structural damage but can also destabilize the foundations of your property.

2) Covers the cost to remove debris

A report released by WHO shows how an Earthquake can trigger the release of certain chemicals in the air. Particularly, if you are located near an industrial facility your home is not seismically resistant, or inadequate warning systems installed in your area. Earthquake Insurance covers the cost needed to remove the debris from your home, lawn, and surroundings.

3) Extra living expenses while your home is being rebuilt

Depending on the structure and location of your home, rebuilding can take anywhere from a month to 3 months. While your home is getting fixed or rebuilt, Earthquake insurance will cover for the extra living expenses like house rent, power bills, etc.

What isn’t covered under Earthquake Insurance?

1) Fire

If your home insurance policy does not cover certain things like debris removal cost, extra living costs, etc then it is smart to purchase a separate Earthquake Insurance. However, an Earthquake Insurance will not cover the things that your home insurance does. For instance, it will never cover you for fire damage to your home. Even if the earthquake was responsible for the fire.

2) Land

Unless your Earthquake Insurance includes Engineering Costs coverage, it won’t cover for the damages occurred to the land your home is built on. Damages like sinkholes due to erosion, large cracks caused by tremors, etc will only be covered with Engineering Costs coverage included in your policy.

3) Vehicles

To cover your vehicles due to damage caused by an earthquake, you need an Automobile Insurance Policy. Your Earthquake Insurance won’t cover for automobile repair or maintenance costs even if they were parked in your garage during the earthquake.

Summary

This post was intended to familiarise a first-time homebuyer or a newbie homeowner with Earthquake insurance. Earthquake insurance is also a must for people owning their businesses in earthquake-prone areas. Do not deter from buying one, as a single occurrence of this natural calamity might wipe your entire property out.

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