The need for earthquake insurance in high-risk locales is a no-brainer. Government and non-profit agencies may step in to help after a powerful earthquake causes widespread destruction, but red tape and other delays can prevent swift relief. Thoroughly researching the best policy for the money will reap the rewards of time well spent if an earthquake hits. Earthquake insurance is not usually offered on a traditional homeowners policy; however, homeowners want adequate insurance coverage for earthquakes. Insurance companies don’t want to go bankrupt if earthquake destruction demands full payment to a number of homeowners who have lost it all. Rates for earthquake insurance depend on the materials used to build and the age of the home, nearness to fault lines, and amount of home equity.
The result is earthquake insurance policies with characteristically low premiums and high deductible rates. Low premiums make it affordable, and high deductibles insure that the homeowner is covered and the insurance company remains in business. In places like California and Japan, the government has teamed up with insurance companies in the creation of special policies and government agencies to provide homeowners with better options for earthquake insurance. Homeowners are also encouraged to “retrofit” or reinforce their homes to meet seismic safety standards in order to minimize earthquake damage and keep insurance premiums at a reasonable level.
No one likes to think about it, but earthquakes are a part of life. In a high-risk area, prevention is impossible, but protection in the form of earthquake insurance is advisable.