When most people think about earthquakes in the United States, Alaska and California are the first two states they think of. However, Tuesday's earthquake in Virginia shattered this idea. The initial 5.8 magnitude quake was followed by several aftershocks, which were felt as far away as Georgia, Chicago and Toronto. Although there hasn't been extensive physical damage, the feeling of safety many people had was shaken. Many residents of the larger cities on the East Coast relocated there after experiencing tremendous earthquakes in California. One of the most important things that has become apparent from the Virginia earthquake is the need for preparedness and ample insurance coverage.
Earthquake damage isn't covered under most business or homeowners insurance policies. Chris Hackett, Director of Personal Lines Policies for Property Casualty Insurers Association of America, stated that most policies don't cover damage from sinkholes or earth movement. However, fires or other incidents that are triggered by an earthquake may be covered by property insurance. He encourages policyholders to thoroughly read their policies to understand any exclusions.
Many people think they won't experience a major earthquake during their lifetime. This is especially true for those who live in areas where earthquakes happen every 100 years or less. Although many people may not experience a strong earthquake like the recent Virginia incident, there are over 5,000 incidents recorded each year by the USGS. Damage from earthquakes has been recorded in all 50 states in history. There have been reports of damage in 39 states alone since 1900. This proves that while some people may not live in areas that commonly experience earthquakes, they're still not immune to the threat.
Earthquake coverage can be purchased as a rider to a personal or business property insurance policy. Anyone who has this type of insurance is advised to contact their insurer to see what offerings are available. If a provider doesn't have this type of coverage, don't hesitate to shop around for it. It's best to be prepared for any disaster. The importance of this insurance can't be stressed enough. Although most people assume California homeowners always buy this coverage, research shows that a mere 12% actually have earthquake coverage. The national average is much lower than 12%.
Earthquake insurance costs vary by location, building type and the age of the building. It's much more expensive to insure older buildings. In addition to this, brick structures are more expensive to insure. Buildings with wood frames withstand the force of earthquakes better, so it's cheaper to insure them.
To offer an example, a home with a wood frame in Washington may cost between $1 and $3 per $1,000 of coverage. The same home may be less than $.50 per $1,000 insured on the East Coast. However, a brick home may cost between $3 and $15 per $1,000 in the Pacific Northwest. In most East Coast locations, the same home may only be between $.60 and $.90 per $1,000.
Every earthquake policy also has a deductible. This means that homeowners must pay upfront for a portion of the damages before the insurer pays the remaining amount. The deductible may be up to 20% of the structure's replacement value. The percentage depends on the insurer and the location of the structure.
There are also options for renters. There are coverage policies that protect personal property. In addition to this, they usually cover living expenses if the building becomes uninhabitable after an earthquake. It's important for renters to keep a list of belongings and their values. Major appliances, furniture, electronics and other expensive items must all be documented properly. A new way of creating a record of belongings is making a narrated video tour of the home and focusing on belongings.
Although the thought of purchasing more insurance may seem dismal, one positive thing to remember is that most comprehensive auto insurance policies cover earthquake damage, so there is no need for some people to buy extra coverage for a vehicle. While most people think the strongest quakes occur in California, keep in mind that the 1812 earthquake in the Midwest, which was along the New Madrid fault line, totaled $100 billion when converted into modern figures.
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