What Is The Situation In The Canton I Live In
Buildings in 19 Swiss cantons are currently insured against fire and natural hazards by a state-owned monopoly insurer and in 7 cantons by private building insurers . At present, the earthquake risk cannot be insured within the context of this obligatory building insurance.
In 1978, 18 cantonal building insurers came together to form the Swiss Pool for Earthquake Insurance, which in the event of an earthquake will provide benefits on a voluntary basis. The cover provided by the earthquake pool currently amounts to CHF 2 billion a further CHF 2 billion is available for a second earthquake in the same year. The building insurer of the canton of Bern quit the pool on January 1, 2013. Since then, future earthquake damage in the canton of Bern can no longer be covered by the pool.
The building insurer of the Canton of Zurich covers earthquake damage with resources from an in-house fund, providing cover of up to CHF 1 billion. The same sum would be available in the event of a second earthquake occurring in the same calendar year.
In the cantons of Appenzell Inner Rhoden, Geneva, Obwalden, Schwyz, Ticino, Uri, and Valais, private building insurers provide fire and natural hazard insurance. In these cantons, no financial resources are available for voluntary compensation following an earthquake.
Can Renters Insurance Cover Earthquakes
In contrast to homeowners insurance, renters insurance covers damage to a tenants personal property through theft, fire, or any other covered damage. These circumstances are known as covered perils. However prevalent, natural disasters such as wildfires or floods are often not included as perils in average renters policies. The same is true of earthquakes.
Luckily, for those who live along the ring of fire or other earthquake-prone areas of the US, earthquake insurance policies and riders exist to cover your possessions in the event of a tremble.
The California Earthquake Authority
The California Earthquake Authority provides most earthquake insurance in California. CEA offers earthquake policies, for homeowners, mobilehome owners, condo unit owners and renters. You cannot buy earthquake insurance directly from CEA you buy it directly from insurance companies that are members of CEA.
You must have a residential property insurance policy in place in order to get a CEA earthquake policy. You must purchase your CEA policy from the same insurance company that you have your residential policy with-see the list of CEA participating insurers here.
Visit the CEA website at www2.earthquakeauthority.com for more information.
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How Earthquake Insurance And Claims Work
The cost of earthquake insurance varies with each policy and policyholder. Typically, earthquake insurance covers your dwelling up to the same limit as your homeowners insurance, and policyholders pay a deductible of 10% 20% of that limit.
For example, let’s say an earthquake completely destroys your home. Your insurance company would pay you up to the coverage limit, minus the deductible.
- Earthquake insurance policy: Coverage limit: $150,000 deductible: 15%
- Claim submitted: $150,000
- Homeowners responsibility: 15% of the $150,000 claim = $22,500
In this example, your insurer pays you $127,500 to cover the damage to your home: $150,000 coverage limit – $22,500 = $127,500.
To file an earthquake insurance claim, call your insurance provider and report visible damage. It can be difficult to evaluate, so it might be worth getting a home inspection especially if your home is old.
Editorial Note: The content of this article is based on the authors opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.
Earthquake Insurance Resources
Does Earthquake Insurance Cover Contents And Living Expenses
Earthquake coverage for contents has coverage limits, sometimes as low as $5,000.
The coverage limits are lower than standard home insurance because most earthquakes won’t destroy living room furniture and other expensive pieces such as pool tables. But what if an antique doll collection or valuable art is destroyed during a quake? It’s essential to make sure that it can be replaced, or the owner is reimbursed at current market value if it is destroyed in an earthquake or its aftermath.
Earthquake insurance through major insurers typically provides some coverage for additional living expenses if you must live elsewhere due to earthquake damage. The limit set for earthquake insurance ALE is often relatively low, so this is something you will want to know ahead of time. Earthquake insurance through the California Earthquake Authority typically does not include ALE but it can be purchased as an add-on.
Expert tip: Renters insurance does not automatically cover living expenses for those dislocated in an earthquake.
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Is Earthquake Insurance Worth It
The U.S. Geological Survey says you should consider these factors when deciding whether purchasing earthquake insurance makes sense for you:
- Your proximity to active faults
- Frequency of earthquakes in your area
- How much time has passed since the last earthquake
- Your homes construction type, layout, materials used and quality
- Whether your home was built with earthquake-preparedness in mind
- The type of land your home sits on, including the type of soil and the slope of the land
- The amount of annual rainfall
- The value of your home and its contents
- The cost to insure the home
Where To Buy Earthquake Insurance
If youre in the market for earthquake insurance, start with your current homeowners or renters insurance company. Ask whether it offers either an add-on to your policy or a stand-alone earthquake policy.
In California, the law requires home insurance companies to also provide earthquake coverage. Golden State residents can also buy coverage through the California Earthquake Authority.
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The Us Is Underprepared For Earthquakes
The top three markets in the country California, Washington and Missouri highlight how unprepared the nation is.
- Despite experiencing 90% of the countrys earthquakes, only 10% of Californias residents have earthquake insurance.
- Only 11.3% of Washingtons residents were covered in 2017 despite having the second-largest market in the seismic space.
- Missouris New Madrid area is a lesson in what skyrocketing premiums can do to the insurance market. In 2000, 60% of its residents had coverage. As of 2020, that number has declined to 12.7%.
Where Do I Buy Earthquake Insurance
Who youll buy your earthquake insurance from will likely depend on how your state typically handles these types of policies and who typically offers them.
Start by contacting your homeowners insurance provider to find out if they offer these types of policies or reach out to your states department of insurance.
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How Much Earthquake Insurance Do I Need
You need enough earthquake insurance coverage to rebuild your house if its destroyed, similar to needing enough homeowners insurance if your home is lost in a fire or another problem.
Your earthquake insurance company will set limits on your dwelling coverage, similar to what you have on a homeowners insurance policy.
The dwelling portion provides funding to repair or rebuild your house if its damaged or destroyed, so you want to make sure you have enough coverage. Your insurance company will help you figure out how much dwelling coverage you need.
You also want to make sure your earthquake insurance policy has enough personal property coverage and additional living expenses coverage.
How Likely Is It That Your Home Will Be Damaged In An Earthquake
Even if you live in a state where frequent earthquakes dont occur, the condition of your home and surrounding environmental factors control how your home will do during an earthquake.
The best way to weigh the odds of damage to your home is to think through the same factors that insurance companies use to calculate your premium:
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Do Earthquakes That Cause Significant Damage Actually Occur In Switzerland
The last major earthquake to cause substantial damage occurred in 1946 in Valais. However, the earthquakes of February 17, and March 14, 1964 in the canton of Obwalden also caused significant damage. A major damage-causing earthquake with a magnitude of approximately 6 is likely to occur at a location somewhere in Switzerland every 50 to 150 years.
The likelihood of a large earthquake occuring near to where you live can be estimated from the magnitudes maps. The effects maps indicate how often specific consequences of an earthquake could occur where you live.
Although such damaging earthquakes are relatively infrequent, earthquakes represent the natural hazard with the greatest potential to cause damage in Switzerland. The reasons for this are twofold. Switzerland has densely populated settlements as well as relatively high building and infrastructure vulnerability. Also, while catastrophic earthquakes occur rarely, they can cause extensive damage over substantial areas. For example, a repeat of the Basel earthquake of 1356, which had a magnitude of 6.6, would cause damage in excess of CHF 100 billion.
How Do I Know If I Need Earthquake Insurance
If youre not sure that you live in an area thats prone to earthquakes, this information is usually disclosed by the seller in a Natural Hazard Report. The U.S. Geological Survey also provides a handy list to help you decide if earthquake insurance is a good idea based on certain factors. Of course, you can ask your insurance agent whether your home insurance company offers earthquake insurance for earthquake hazards in your area.
These factors include your proximity to active fault lines, the frequency of earthquakes in your area, whether your home was built to withstand a quake or if its been retrofitted, the type of land/soil your home was built on, the value of your home, if your home is on a hill, and more.
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Earthquake Insurance: Do You Need It
Standard homeowners insurance doesn’t cover earthquake damage. See what earthquake insurance costs in California, Seattle, Oklahoma and elsewhere.
Earthquakes happen daily in various places throughout the world.
Some of those earthquakes are unfelt by us and detectable only by seismogram recordings, while others are not just felt but cause severe damage and even death. The tricky part about earthquakes is, you never know where and when they’ll occur or how severe they will be. This is where earthquake insurance comes into play.
If you’re questioning whether you should buy earthquake insurance, we certainly can’t fault you , but there are some important facts to consider before you make your decision. Here, we’ll cover everything you need to know to make an informed decision on earthquake insurance.
- On a raised foundation
- Older and not retrofitted to limit damage
- In a higher-risk zone that is, near an active area or on soil that is more likely to move
The type of coverage will affect your premium as well. A policy that covers replacement cost rebuilding your home with new materials of similar quality — will be more expensive than one that pays actual cash value, which considers the wear and tear of your home as it currently sits.
Does Homeowners Insurance Cover Earthquake Insurance
Like flood insurance, homeowners insurance will not cover damages from earthquakes. You must purchase additional coverage to protect your home and belonging from damages caused by an earthquake event. Note that there are a few scenarios where earthquake insurance won’t cover earthquake-related damages.
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Is Earthquake Insurance Worth Getting
Earthquakes are a reality in many parts of the world, and their effects can be devastating. Whether you live in an area prone to earthquakes or not, its important to be aware of your risks and take steps to protect yourself. One measure you can take is to buy earthquake insurance. Many people are unsure of whether or not this type of coverage is worth it, so well explore the pros and cons of earthquake insurance in this blog post. Well also explain what kind of coverage is available and help you decide if its something you should consider for your household.
Why Should I Consider Earthquake Insurance
When earthquakes strike, the damage they cause can be catastrophic. The 1994 Northridge, California earthquake registered 6.7 on the Richter scale. Today, its considered the third costliest U.S. natural disaster with an estimated $25 billion in damages. That was certainly a seismic hazard. Experts have warned that the southern part of the San Andreas Faultline in California and the Cascadia Subduction Zone in Washington state are due for The Big One, a quake that measures at least a 7.8 magnitude.
Its not just the west coast that we should be worried about. Experts in the central U.S. have warned that a large area within the New Madrid zone is at high risk for a catastrophic earthquake. According to a U.S. News article, experts believe there is a 7-10% chance of a magnitude 7.0 or greater earthquake in the next 50 years and a 25-40% chance of a smaller but still potentially devastating magnitude 6.0 quake.
Catastrophic or not, an earthquake may result in the need for emergency repairs. Those with damaged homes rendered uninhabitable will certainly face additional living expenses.
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Does My Homeowners Or Renters Insurance Cover Any Earthquake Damage
In general, your homeowners or renters insurance does not protect your house from the damage an earthquake causes, even if the damage is indirect.
- The main exception is fire. See below.
- In some cases your homeowners or renters insurance may specifically cover direct loss due to explosion, theft, or breaking glass caused by an earthquake, even if you do not have earthquake insurance. Ask your insurance agent.
- Read your homeowners policy and contact your insurance company whenever an earthquake damages your property. Do not assume that the damage is not covered.
Homeowners Insurance Covers Fire Damage
California law says that both homeowners and renters insurance must cover fire damage that is caused by or follows an earthquake.
This means that the fire damage is covered, whether or not you have earthquake insurance.
I Have Homeowners Insurance How Can I Get Earthquake Insurance
If you have homeowners insurance in California, your company must offer to sell you earthquake insurance. It must offer this every other year.
- The offer must be in writing. It must tell you the amounts it covers , the deductible, and the premium.
- You have 30 days to accept the offer. The 30-day period starts the date the company mails the offer to you. If you do not reply, you are rejecting the offer.
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Does Renters Insurance Cover Earthquakes
Standard renters policies pay a tenant to replace their items due to theft or damage. A renters policy also protects a tenant from litigation. Renters earthquake insurance covers a tenant, except this policy would replace items damaged in an earthquake.
Renters are not always required to purchase earthquake insurance when moving into a new space. However, its not uncommon for the property owner to require it as a condition to move in. However, earthquake insurance might be recommended depending on the homes location. Purchasing separate earthquake coverage or adding an endorsement to an existing renters policy is the only way to gain reimbursement for items damaged due to a quake.
Weighing The Pros And Cons Of Earthquake Insurance
Only you can decide whether or not it is worth paying for earthquake insurance. It is tough to predict when an earthquake will occur. While regions may have long periods of low activity, it only takes one major event to damage or destroy your property.
This insurance is about protecting the money you’ve invested in your home. By not having it, you take the risk of having damage to your home and losing property that you can not afford to repair or replace.
If you have a mortgage to pay off, you may end up paying even more because your mortgage company will still want to be paid even if an earthquake destroys your home. If your home is paid off, you lose all of the value it has built up over the years with no way to recoup the loss.
The best course of action is to become informed. Look over official data from the U.S Geological Survey about the region you live in on its Earthquake Hazards Program website. This program gives you information about your state and lists resources you can use to decide whether you should get earthquake coverage for your home.
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What Does Earthquake Insurance Cover
Exactly what your earthquake insurance covers will depend on your individual policy. In general, though, an earthquake insurance policy consists of three parts:
- Dwelling coverage, which helps you pay to repair or rebuild your home
- Personal property coverage, which helps you pay to replace damaged personal items such as furniture or TVs
- Loss-of-use coverage, which pays your temporary, additional living expenses if you need to live somewhere else while your home is being repaired
Additionally, your insurance may include building code upgrade coverage, which means that if you need to rebuild your home at an increased cost because the original structure isnt compliant with current building codes, your insurance will help pay those extra expenses.
For additional coverage, ask your insurer about the types of riders they offer. One example is homes with masonry veneers to get your earthquake insurance to pay for the repair of this type of exterior, youll need to purchase coverage specifically for this purpose.
Earthquake Insurance And Deductibles
Quick recap: an insurance deductible is the amount of money you choose when purchasing a policy that will be subtracted from any future claims payouts.
When it comes to earthquake insurance, deductibles tend to be high, somewhere between 15-20 percent of your dwelling coverage limit. Cities built closer or on active fault lines will have higher deductibles, so youll end up paying more out of pocket if you file an insurance claim.
So lets say your dwelling coverage is $200,000, and you have a 20 percent deductible. If you file a claim for $200,000 for damage to your home, youre responsible for paying $40,000 before your insurance kicks in.
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