Your Insurance: What homeowners need to know about Earthquake Insurance

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Recent news of large earthquakes striking population centers in Mexico and Taiwan present an opportunity to discuss earthquake insurance and coverage a little closer to home. We’ll provide some education and guidance for homeowners and give you some simple facts you should be aware of when it comes to evaluating your insurance portfolio. 

Does my Homeowner’s Insurance policy cover earthquake damage?

A standard homeowner’s, landlord or renter’s policy does not typically include coverage for earthquakes or damage caused by earthquakes. 

How can I get coverage for Earthquake Damage?

Insurance coverage for earthquakes can be obtained by either adding a special endorsement to your current policy, or by obtaining a stand-alone earthquake policy. Varying deductible levels are available but would typically be 5% or 10% of the estimated replacement cost of your residence. If your home was insured for $500,000 for example, a 10% earthquake deductible would be $50,000. That may sound enormous, but the coverage is designed for catastrophic losses and is priced quite low to make it affordable. 

How much does Earthquake coverage typically cost? 

There is no set factor as the cost is based on a combination of the home age, replacement cost and foundation type amongst other variables. In the state of Kansas however, earthquake coverage can be quite reasonable, and a good estimate is about 5% of your current homeowner’s insurance premium. If your homeowner’s policy premium was $2,000 annually for example, earthquake coverage would run about $100 per year. 

Should I add earthquake coverage to my insurance policy? Isn’t that for California residents only?

The fact is earthquakes may have impact throughout mid-western states and are not isolated to California. In recent memory, earthquakes originating in Oklahoma were felt in the Kansas City metro region. St. Louis is part of the New Madrid seismic zone which receives hundreds of smaller earthquakes every year. Without an earthquake endorsement on your home policy, there is simply no coverage for a catastrophic earthquake event. Earthquake coverage is optional, and a lender or mortgage company will not mandate coverage on your policy. Homeowners should be aware of the risk and know coverage is available. We recommend starting a conversation with your independent insurance agent about adding earthquake coverage to your insurance portfolio. 

Working with families as their trusted insurance advisor is what we do every day. Connect with us for an insurance review and to discuss any aspect of earthquake related insurance coverage. 

Flury-Hinderks Insurance is an Independent Insurance Agency located in Overland Park and is a trusted advisor for thousands of families in Johnson County. Contact Flury-Hinderks Insurance today for a comprehensive insurance review.

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