Earthquake insurance provides property coverage for damages resulting directly from seismic activities. These activities include sudden and unexpected shaking or trembling of the ground caused by natural seismic events or volcanic eruptions. It is crucial for property owners in earthquake-prone areas to consider this specialized form of insurance due to the high potential for significant property damage.
What does Earthquake Insurance cover?
Earthquake insurance typically covers damage to the property and the personal belongings inside it directly caused by:
- The seismic event itself (earthquake shaking)
- Volcanic eruptions, specifically the seismic activity associated with them.
It is important to carefully review the terms and limits of the coverage as stipulated in the insurance policy.
Common Exclusions
While earthquake insurance covers direct damage from the shaking ground, certain resultant events typically fall outside the scope of the coverage, including:
Fires: Although fires can be a common aftermath of earthquakes, losses due to fire are usually covered under a standard homeowners’ insurance policy.
Explosions: Similar to fires, damage from explosions triggered by an earthquake are not covered under earthquake policies.
Floods and Tidal Waves: Water-related damage post-earthquake, including floods and tidal waves, typically requires additional flood insurance coverage.
Tips for Buying Earthquake Insurance
Assess the Necessity: Evaluate if your locality is prone to earthquakes, a critical first step in determining the need for this insurance.
Understand the Coverage: Scrutinize what the policies cover and the exclusions to ensure comprehensiveness against potential losses.
Check Building Regulations: Adhering to local building codes and laws, like those stipulated under Federal Emergency Management Agency (FEMA) guidelines, can mitigate risks and might also affect your insurance terms and premiums.
Compare Policies: Look into various offers and providers to find a policy that balances adequate coverage with an affordable premium.
Conclusion
Earthquake insurance is specialized coverage addressing the unique needs arising from earthquake or seismic activities. Evaluating your individual or business need for this insurance based on geographic location and potential risk exposure is crucial. Furthermore, understanding the extent of coverage and its exclusions ensures better preparedness and financial stability post-event.
