Homeowners insurance doesn't typically cover damage or loss due to an earthquake, so homeowners that live in an area likely to have earthquakes may consider purchasing separate earthquake insurance. These policies are typically high deductible and therefore are useful if your entire home is destroyed but won't cover less significant damage to the home. Rates for these policies vary with location and type of home. Homes made of wood withstand earthquakes better than those made of brick and therefore have cheaper policy rates.
It is estimated that less than 20 percent of Californians carry earthquake insurance. Earthquake experts predict a catastrophic earthquake will occur in California within the next 30 years. Other states have also recently experienced damaging earthquakes, including Virginia and Colorado. Let's examine some myths that prevent people from acquiring earthquake insurance.
Myth: My home survived previous earthquakes, so it will be fine next time too.
Fact: Every earthquake travels through the ground on a unique path. New fault lines are being discovered. The next earthquake could be caused by a different shifting fault that does result in damage in your neighborhood and destruction of your home.
Myth: FEMA will give me money to rebuild, so I don't need insurance.
Fact: Although it may be possible to obtain low-interest loans through FEMA, it is not a handout. It is a loan that will need to be paid back. In addition, it isn't a guarantee that money will be available. Congress has to agree to it, and banking on Congress agreeing is definitely a gamble.
Myth: I will just go into foreclosure and then obtain a new home.
Fact: Going into foreclosure should not be taken lightly. Your credit score will be devastated and it may be many years until you are able to borrow money again for a home or even a car. It may be difficult to find a place to rent. Foreclosure is even known to affect employment ability.
It is recommended that you consider carrying earthquake insurance if you live in a place susceptible to earthquakes. Keep in mind that insurance companies will stop selling coverage for a while after an earthquake has occurred because there may be significant aftershocks and the aftershocks may be located away from the original epicenter. Look into your earthquake insurance options now before it is too late.
Get the coverage you need. Call Mitchell & Mitchell Insurance Agency at (415) 883-2525 for more information on San Francisco earthquake insurance.