Earthquake insurance is a policy that helps homeowners who suffer property damage following an earthquake. Traditional home insurance policies do not cover expenses for earthquake damages. If you need earthquake coverage, then you need a separate policy.
A homeowner who lives in an earthquake zone may want to consider earthquake insurance. This policy can save thousands of dollars in the event of an earthquake damaging property. For example, a home that is valued at $200,000 may suffer serious damage following an earthquake. It could cost $30,000 to repair the damages. Without earthquake insurance, the repair cost would fall entirely on the homeowner. With an earthquake policy, almost all of that $30,000 would be covered by the insurance company.
Earthquake policies are like most homeowner’s insurance policies. The homeowner has their home’s value assessed, along with other factors. This allows the insurance company to produce a quote for coverage. The agreement indicates what percent or the maximum amount the policy will pay.
If the earthquake becomes a reality, then the homeowner contacts the insurance company. The insurance company will have to inspect the property before paying on the policy. After they are sure the damage occurred because of the earthquake, the insurance pays the money as agreed.
Some earthquake policies offer lump sum payments following an earthquake. Others offer a fixed percentage of all repair costs. Almost all policies have expenses the homeowner must pay out of pocket. After that is paid, then the insurance usually handles the rest. It depends on the premium of the policy.
The main benefit is your property is covered following an earthquake. Otherwise, you’ll have to pay for everything on your own.