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A standard homeowner’s policy does not cover earthquake damage. You will have to add the endorsement for an additional fee. Earthquake insurance is also available as a stand-alone policy. Your homeowners policy and earthquake insurance don’t overlap, but work together to give your home more insurance protection. Most insurance companies won’t sell new earthquake insurance policies for anywhere from 72 hours to 60 days after a quake due to the expectation of aftershocks.
Earthquake insurance covers repairs needed because of earthquake damage to your home and may cover other structures not attached to your house, like a garage. Some policies also insure your personal property against damage. It may also cover increased costs to meet current building codes, costs to stabilize the land under your home and debris removal. The coverage also pays for the extra living expenses you may have while your home is being rebuilt or repaired.
What your earthquake insurance doesn’t cover (the exclusions) varies by insurance company. Review your earthquake coverage and declarations page to learn the exclusions or speak to your agent. Some of the most common exclusions in earthquake insurance are:
It depends on the policy language. When shopping for coverage, ask your insurance agent to confirm that manmade earthquakes are covered. The Oklahoma Insurance Department recently requested all carriers to send their policyholders a written letter clearly stating if manmade earthquakes are covered under their policy.
How much coverage is right for you depends on your unique financial situation. Insuring your home for its appraisal or loan value likely means you’ll only have enough coverage to repay your lender. It may not be enough to repair or rebuild your home, especially if it’s a total loss. Usually, the dwelling coverage limit will be the same on your homeowner’s insurance policy and your earthquake insurance.
If you don’t have enough homeowner’s insurance coverage, you probably won’t have enough earthquake insurance either. You should review your dwelling coverage from time to time to be sure it doesn’t drop below the cost to replace your home. If it drops below 80 percent of the full replacement cost of your home, your insurance company may reduce the amount that it will pay on a claim.
The following are questions that may help you decide how much coverage you need:
For dwelling coverage to repair or rebuild your house:
For contents coverage:
For additional living expense coverage:
Earthquake insurance premiums are determined by your home’s characteristics. Some common characteristics are:
Typically, an Oklahoma homeowner can expect to pay $50 to $300 per year for earthquake coverage.
A deductible is the amount the homeowner is responsible for on each claim. The insurer is responsible for the amount greater than the deductible, up to the coverage limit. The deductible for earthquake insurance usually is 10%–20% of the coverage limit. Depending on the policy, there may be separate deductibles for the dwelling, outside structures such as outbuildings, detached garages and yard fences, and personal contents. You may not be responsible for a deductible for additional living expenses coverage.
As coverage and terms of insurance can vary from company to company, ask your agent how the deductibles will be calculated under your policy. Assume that an earthquake totally destroys your home and you have earthquake insurance that covers all the damage. The following table explains how one type of earthquake deductible may work.
The deductible you pay is the minimum out of pocket expense that would be owed for damages covered by the policy. Another unique feature of earthquake insurance is time limits. Typically, all earthquake events in a 72-hour period are considered one event—with one claim and one set of deductibles. Damage caused by aftershocks more than 72 hours after the first quake could mean a second claim with a second set of deductibles. The period of time may not be 72 hours in all policies. Ask your insurance agent.
While we always welcome FEMA to assist our state in natural disasters, many people do not qualify for their assistance. FEMA works by county and they work on damage reports for that county. If there is not enough uninsured damage, there would not be any funding. You could also be on the edge of a heavily damaged county but you are in a different county that did not sustain much damage. Therefore it is best to buy adequate insurance coverage to protect your property.
Every insurance company offers different earthquake insurance policies with different premiums, coverage, and deductibles. Make sure you understand how much your earthquake insurance costs and how much coverage you have. If you have questions, ask your agent or call our Consumer Assistance Division at 800-522-0071.
Yes. Document, document, document. Many times, claims are denied for previous damage and settlement (shifting of your home as a result of repeated soil expansion and contraction). If you take video of your home periodically to show the condition of the home, it would difficult for an insurance company to deny a claim if damage does occur.
You could also obtain a home inspection showing that the house is not settling and that there is no damage to the house. The inspector would also list any damage found so it is documented that the services were performed by a professional.