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Earthquake Insurance

Most homeowners policies have very limited coverage for earthquake damage--excluding direct loss from earth movement but covering loss by a subsequent fire, explosion, breakage of glass, or theft. As a result, if you live in an area prone to earthquakes, you may want to purchase additional coverage with earthquake insurance.

What is earthquake insurance?

Earthquake insurance policies cover loss to your home and your possessions. Coverage can also include costs incurred to minimize further damage after the earthquake, and costs of additional living expenses. The cost of earthquake insurance varies, depending on the scope of coverage and your location (e.g., earthquake zone). You can purchase earthquake insurance through an insurance company, and some states even offer earthquake insurance to their residents.

Should you buy earthquake insurance?

It depends on a variety of factors. Consider the following questions before you buy earthquake insurance:

  • What are the chances of an earthquake occurring near your home? If you live in a seismically active area, you may want to consider purchasing earthquake insurance.
  • What is the likelihood of an earthquake causing considerable damage to your home? The construction of your home, the strength of your walls, how well your home is attached to its foundation, and the number of stories in your home all play a role in how well your home will fare during an earthquake.

If you're unsure of the answers to these questions, ask your insurer or visit the Federal Emergency Management Agency website at www.fema.gov for more information.

The claims process

You'll want to report your losses to your insurance agent or company as soon as possible. Remember to be patient, since your insurance agent or company is probably receiving hundreds of similar claim reports at the same time.

Depending on the severity of the earthquake and number of claims in the area, you may receive a claim form in the mail or a personal visit from your insurance adjuster. If an adjuster comes to your house, he or she will study the damage to your home and possessions and assign a dollar value to it. The more information you can give the adjuster (e.g., inventory of damaged or lost possessions, photographs, receipts), the faster and more accurately your claim will be settled.

After the earthquake, you may also be contacted by a public adjuster. Public adjusters do not work for an insurance company. They work for you and charge a fee for their services, which can be up to 15 percent of your settlement and is not covered by your insurance. These types of adjusters maintain that because they are independent, they can more effectively negotiate your claim settlement. If you use a public adjuster, you can check his or her qualifications by contacting your state's department of insurance.

Earthquake safety tips

Although no one is ever prepared for a disaster such as an earthquake, there are some steps you can take to ensure your safety:

  • Know the areas in your home that you should go to during an earthquake (e.g., underneath strong desks or tables, sturdy doorways) and the areas that you should avoid (e.g., windows, bookshelves).
  • Know how to turn off the gas, water, and electricity.
  • Make sure that your house is properly structured (i.e., the roof is attached securely to the walls, the walls are attached strongly to each other, and the walls are braced and firmly attached to the foundation). A building inspector or contractor can help you determine if the structure of your home needs to be strengthened.
  • Reinforce your chimney to the house.
  • Bolt down water heaters, gas tanks, and large appliances.
  • Anchor large pieces of furniture to the floor or wall.
  • Place large items on lower shelves.
  • Make sure you have enough water and food to last three days. Have a first-aid kit and a fire extinguisher readily available.
  • Keep an inventory of your possessions, including model and serial numbers, and keep a copy outside of your house.