Earthquakes: Is Your Home Prepared for it?

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.