Should Homeowners Purchase Earthquake Insurance?

Given the deadly earthquake that struck Haiti in January, more focus has turned to the potential cost of U.S. earthquakes, which has been on the rise due to the growth in urban development in seismically active areas.

Coupled with the vulnerability of older buildings that may not have been constructed or upgraded to present building codes, and you have the potential for not only loss of life, but financial disaster.

According to information from the Insurance Information Institute (I.I.I.), a large number of homeowners residing in seismic zones choose not to buy earthquake insurance. I.I.I. reports less than one-fourth of California homeowners possess earthquake coverage.

Since earthquakes are not covered under standard U.S. homeowners or business insurance policies, coverage is often available for earthquake damage in the form of a supplemental policy to homeowners or business insurance.

Homeowners should keep in mind that standard homeowners and business insurance policies may cover losses resulting from a fire after an earthquake. That compensation could include added living expenses along with business interruption coverage.

Earthquake insurance policies many times carry a deductible, typically in the form of a percentage as opposed to a dollar amount. Consumers will find deductibles falling in the range of 2 percent to 20 percent for the structure's replacement value.

For those living in California, residents can also obtain coverage from the California Earthquake Authority (CEA). The CEA makes available homeowners dwelling coverage deductibles of either 10 or 15 percent. The CEA coverage limit is the insured value of an individual's residence as noted on the companion homeowners' insurance policy.

Consumers need to know that earthquake insurance premium rates are decided differently by each insurer and can run the gamut. Deciding factors can include the locale of the building and what materials were used to construct the building in the first place.

While each consumer must decide if earthquake insurance is right or not for them learning about it is definitely worth their time.

Don't buy the Wrong Home Insurance Policy

Home insurance costs have been falling for quite some time. With that being said, millions of people still make grave mistakes when purchasing their home insurance policy. If you think that any insurance policy is enough, you should reconsider this notion. It is very important that you know what type of home insurance you need, what you can afford, and what will keep your home safe against any and every disaster. You never want to jeopardize the well being of your home. Not only is this where you live, but it is also one of the biggest investments that you will ever make.

With all of the time that you put into buying your home, you should do the same when purchasing insurance for your new property. But before you get started, you should know that there are three different types of coverage that will be included in your overall policy.

First off, there is coverage that protects the structure of your home. For instance, if there is a fire that damages the structure, this is the coverage that will be taken into consideration when getting compensated for repairs.

To go along with this, a home insurance policy will also cover your possessions to a certain extent. Before you purchase insurance, make sure that you know the value of the items that you keep in your home. Remember, you will only get reimbursed up to the amount of coverage that you purchase. If you do not carry enough coverage for your "contents' you may not be able to replace everything should you have a fire, theft, etc.

Last but certainly not least, liability coverage. What would you do if your dog bit the mailman? How about if somebody falls coming onto your property? You need to have liability coverage in case somebody gets hurt on your property, and in turn decides to sue you.

Be careful when buying home insurance. Your home is a big investment, and you want to keep it covered in terms of structure and possessions, while also carrying liability coverage.

Does your Home Insurance Cover Your Needs?

Believe it or not, many people think that their home insurance policy covers them for anything and everything that has to do with their property. While you may get a very good level of coverage, this is simply not true. And if you get caught thinking that home insurance will cover every aspect of your property, it is safe to say that you could end up losing a lot of money in the long run. It is always a good idea to know what you are paying for, and what you are not covered for. This will make it much easier for you to get along.

So what doesn't your home insurance policy cover? This is different for every person, but there are some general items that are not going to be covered. For instance, you are not going to be covered for flooding under your home insurance policy. If you are interested in this type of coverage, you need to purchase flood insurance. It is a shame that so many people think that their home insurance protects them against flood. Upon finding out that they were not covered, most of these people have to dip into their own pockets to pay for flood damage.

The best way to know what isn't covered is to know what is covered. To do this, take out your home insurance policy and go over it detail by detail. When doing this, you should stop anytime that you have a question or concern. At this point, highlight the problem area so that you can check on it later. Of course, the best way to check on anything that you are unsure of is to call your home insurance company. They will more than likely be able to give you a list of what is covered by your policy, and what you would be responsible for.

Overall, your home insurance policy is sure to cover you for many items such as fire, theft, etc. But with that being said, this is not a catch all that will keep you safe from anything that could happen to your home.