Earthquake Insurance

IS EARTHQUAKE DAMAGE COVERED BY MY HOME, RENTERS, COMMERCIAL PROPERTY OR BUSINESS OWNERS INSURANCE POLICY?
No, unless you have added an earthquake endorsement. You can also purchase a separate earthquake policy.
WHAT DOES EARTHQUAKE INSURANCE COVER?
Not all insurance companies offer the same coverage. Please discuss the following points with us:

  • Damage to the physical structure and other structures
  • Personal property or business contents damage
  • Increased costs to meet current building codes or to stabilize the land under the home
  • Debris removal
  • Living expenses while the home is rebuilt or repaired
  • Loss of business income
  • Masonry (brick) veneer, fences, sidewalks, pools, and other items outside of the structure

DOES MY EARTHQUAKE INSURANCE INCLUDE COVERAGE FOR EARTHQUAKES ARGUABLY RESULTING FROM FRACKING?
Some do, some don’t. Refer to the notice you received in December or contact us.
WHY SHOULD I CONSIDER EARTHQUAKE INSURANCE?
Earthquakes can cause significant damage to property. It’s important for you to consider how you would manage the costs of recovering from an earthquake should you be impacted. For example, can you afford to repair or rebuild and how likely is the home or business to be seriously damaged? Brick, wood-frame with crawl spaces and multi-story buildings are the most likely to suffer serious damage from an earthquake.
HOW CAN I PURCHASE EARTHQUAKE COVERAGE?
An earthquake endorsement can be added to home insurance or business owner’s and commercial property policies assuming your insurance company offers an earthquake endorsement. Earthquake insurance is also available as a stand-alone policy independent of homeowners or business owners insurance.
HOW MUCH COVERAGE SHOULD I BUY?
The right coverage value will depend on how much of the repair and replacement costs can be paid out-of-pocket should you suffer a total loss. Insuring a home or business for just its appraisal or loan value will likely mean that in the event of an earthquake, there will only be enough coverage to repay the mortgage lender and not enough to repair the home.
Additionally, it is important to be aware of insurance policy limits of coverage. Often within these limits are sub-limits on specific items, such as a $50,000 limit on personal property replacement with a $5,000 sub-limit on computers and peripherals .
HOW MUCH DOES IT COST?
The price of adding earthquake insurance is a small percentage of the cost of the underlying homeowners or business owners policy. Earthquake policies vary in cost depending on multiple factors, including the desired level of coverage and deductible amount. They are also determined by the property’s location, age and construction. The sample quotes below are for illustration purposes only.
A 1996 brick veneer office building in Oklahoma county, with a value of
$500,000 and contents value of $100,000 would cost around $1,000 a year with a 2% deductible.
A similar home in the area with a value of $200,000 and content value of $100,000 would cost $235 a year with a 5% deductible.
WHAT IS THE DEDUCTIBLE AND HOW IS IT CALCULATED?
Earthquake insurance carries a separate and substantial deductible. The deductibles work differently than those of standard policies, including separate deductibles for the property, outside structures such as garages or fences, and for contents. Be aware of all the deductibles you face if damage is sustained from an earthquake.
The deductible is calculated as a percentage of the insured property’s value – commonly 2 to 15 percent. For instance, a $100,000 home would require a deductible of $2,000 to $15,000.

Flood Insurance

IS DAMAGE FROM FLOODING COVERED BY MY HOMEOWNERS, RENTERS OR COMMERCIAL POLICIES?
No, a standard homeowners or commercial policy covers storm damage such as hail, fire or lightning, sleet, ice, snow. Most policies will also cover water damage caused by plumbing, household appliances, or an emer­gency sprinkler system, but not rising water or run-off. You can protect your home, business, and belongings with a flood insurance policy.
l’M NOT IN A FLOOD ZONE, WHY DO I NEED FLOOD INSURANCE?
More than 25% of all flood claims come from low-risk areas. You don’t need to be near water to have flood damage.
WILL MY COVERAGE BE EFFECTIVE IMMEDIATELY?
No, there is a 30 day waiting period before coverage goes into effect. In order to have coverage by May 1st, your policy will need to be purchased no later than April 1st. However, it can be effective immediately if required by financial lender.
WHAT DOES FLOOD INSURANCE COVER?
Not all insurance companies offer the same coverage. Please discuss the following points with us:

  • Damage to the physical structure and your personal belongings inside your home or business.
  • Damage caused by erosion due to currents or uncommon water cycles.
  • Damage caused by mudflows or mudslides
  • Additional living expenses while your home is inhabitable
  • Belongings outside of the build ling including landscape, septic systems, patios, hot tubs, etc.
  • Currency, precious metals, or stock certificates
  • Basements, crawl spaces, walkout basements
  • Items in your basement such as clothes, electronics, furniture, carpeting, paneling, bookcases, built-ins, etc.

HOW MUCH DOES IT COST?
Premiums vary greatly from area to area and depend on factors including flood risk and the value of the home or property being insured. The sample quotes below are for illustration purposes only.
A flood policy costs about $450 annually for a home valued at $250,000 with $100,000 of personal property in a low to moderate risk area.
It costs approximately $2,000 annually for an office building valued at
$500,000 with $50,000 of contents in the same area.

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