Why It’s Important for Everywhere
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, and insurance costs vary by location, building type and the age of the building:
It’s much more expensive to insure older buildings
Brick structures are more expensive to insure
Buildings with wood frames withstand the force of earthquakes better, so it’s cheaper to insure them
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.
Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures and create a customized insurance portfolio. Give us a call today at 617-723-0700 or contact us by e-mail.