Earthquake is nothing new in
California. As Californians, we experience earthquake more than any other
states in the United States, and perhaps the world. The insurance coverage for
natural disasters has been increasing yearly for its increase in activity throughout
California. Each year, California has about 10,000 earthquakes in which most
cannot be felt. However, disasters do
happen and it is best to be covered beforehand. In 1994, Northridge earthquake
was the deadliest natural disaster that occurred in the United States, which
required the insurance companies to offer earthquake coverage when issuing
insurance for residential homes.
AllState offers different types
of insurance for any natural disasters such as homeowners, mobile home, condo,
and renters. Most homes do not cover earthquake and other natural disasters.
These insurances tend to be fairly flexible, depending on the policies. One can
easily reduce the risk of earthquake damage by getting specific insurance for
your needs. As the chances of natural disaster occurring is slim, the cost of
insurance is low.
Most residential insurances do
not cover earthquake, or any other damage from natural disasters. An additional
CEA (California Earthquake Authority) coverage must be bought to insure your residence.
The CEA policy requires the homeowners to set deductibles, the amount in which
you have to cover without the help from insurance companies. Deductibles are
usually set in between 10-15% of the policy limit, or the amount you household
is insured. If the personal belongings and possessions are lost due to fire,
50-70% will be covered. There is some exclusion when it comes to household
furniture and belongings such as jewelries, fur coats or sofas. On average, the
annual cost of coverage for $500,000 policy is around $7,500.
In the long run, having covered
by your insurance company is worthwhile, since the cost is low and natural
disaster is unavoidable. In fact, there is a 99% chance of 6.7+ earthquake will
hit California within the next 30 years. If you want to play it safe, investing
in safety for the future is always good to have as a peace of mind.
