Does my homeowners insurance cover earthquakes?
Your homeowners insurance typically protects your dwelling and other structures and contents from damages due to fire, smoke, lightning, hail, theft and other exposures as described in your policy. Earthquake damage, however, is typically excluded from homeowners insurance policies.
Is earthquake insurance necessary?
Earthquake insurance isn’t mandatory, but depending on where you live, your home might be at risk of suffering irreparable damage. California law requires homeowners insurance companies to offer add-on earthquake coverage, but there’s no law forcing anyone to actually purchase a policy.
What percentage of homeowners have earthquake insurance?
About 20% have earthquake insurance, according to the earthquake authority’s estimates. That’s about twice the state average. If you’re among the 90% of homeowners statewide without quake coverage, you may want to rethink that decision.
Why do insurance companies not offer earthquake insurance?
Insurers do not want to sell earthquake policies but do want to sell lucrative homeowners’ and auto policies. So they offer earthquake insurance to homeowners to keep them as customers. … Insurers are also concerned that if they refuse to sell earthquake insurance, state regulators may force them to.
What covers earthquake coverage?
Earthquake insurance covers damage to your home, personal belongings and additional living expenses if you need to temporarily live somewhere else after an earthquake.
What happens if you have no earthquake insurance?
If an earthquake damages your home and you don’t have earthquake insurance, you’ll most likely end up paying out of pocket to make any necessary repairs. If your property is at high risk for earthquakes, the seller may disclose this in a Natural Hazard Report.
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.
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.
How do earthquake deductibles work?
A deductible is the amount the homeowner is responsible for paying on each claim. 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. Depending on the policy, there may be separate deductibles.
Does FEMA pay for earthquake damage?
FEMA grants are not meant to take the place of earthquake insurance. That’s a message that FEMA spokesperson Jack Heesch says his team has been explaining regularly since they were deployed to Alaska in the wake of President Trump’s federal disaster declaration.