Is earthquake insurance necessary in California?
Though California has nearly 16,000 known earthquake faults, you are not required by state law to carry earthquake insurance. Your basic homeowners and renters insurance policies do not cover earthquake damage.
Do the majority of homeowners in California have earthquake insurance?
The entire state is vulnerable to earthquakes, but just 13% of homeowners have earthquake insurance. And to explain why and whether last week’s quakes are changing that, we’re joined by Glenn Pomeroy. He’s CEO of the California Earthquake Authority, a nonprofit that sells earthquake insurance plans.
How much more is earthquake insurance?
Also keep in mind that earthquake insurance usually has a higher deductible than other kinds of insurance—generally ranging from 2% to 20% of the damage. On a $400,000 home, your deductible would be $8,000 at 2%, but this rises to a whopping $80,000 at 20%.
How common is earthquake insurance in California?
In California, for example, just 10% of homeowners are insured against earthquake damage, according to the California Earthquake Authority (CEA), the country’s largest provider of earthquake insurance.
Does FEMA pay for earthquake damage?
Traditional earthquake insurance covers damage caused by an earthquake by insuring “pure loss.” That means they will assess the value of the items lost and reimburse you for that specific amount – this amount will be different for different people.
Is earthquake damage covered by insurance?
Earthquakes and coverage
Homeowners and renters insurance does not cover earthquake damage. A standard policy will, however, generally cover losses from fire following a quake and, if such a fire makes your home unlivable, cover the additional living expenses incurred while you live elsewhere during repairs.
What happens if your house is destroyed by an earthquake?
Earthquake insurance usually pays for damage to the structure, temporary living expenses and personal property replacement. But you may still have hardship because of the deductible, and because payment might not come immediately. … So if an earthquake destroys your home, you still have a mortgage obligation.
Is earthquake insurance tax deductible?
Earthquake insurance generally comes with a deductible of 15% of the home’s value, according to John Rundle, a professor of physics at the University of California, Davis.
How do I calculate earthquake deductible?
The deductible for earthquake insurance is usually 10%–20% of the coverage limit. For example, if your home is insured for $200,000 a 10% deductible would be $20,000.
Why is earthquake insurance deductible so high?
Earthquake deductibles are high because the damage from them tends to be catastrophic, making them a higher risk for insurers. To cover costs, they need to make deductibles high.
What is earthquake deductible buy down?
Benefits of an earthquake deductible buydown policy
You protect your cash flow and the potential situation of being unable to afford the deductible. … Flexibility – choose a limit to cover the deductible up to $500,000, or a portion of your earthquake deductible from 10%, 5% or 3% to $2500.