How to Compare Earthquake Insurance in California

If you are living in California, the most seismically active state, do not assume that your homeowners insurance will provide coverage for the next big one. If you want earthquake insurance in this state you must buy separate a separate policy. However, the California Earthquake Authority (CEA) has found that almost 85% of homeowners in the region do not have separate earthquake insurance. It is a good idea to consider insuring yourself against earthquakes while living in California. Comparing different policies will help you choose the most appropriate insurance coverage for you.

Instructions

Difficulty: Moderately Easy

1. Estimate the value of your home and belongings. Get a professional appraiser involved if you aren't quite sure of the total worth. Only after determining this can you decide what would be appropriate coverage.
2. Compare each insurance policy for the total extent of coverage. Does the policy provide protection only for the home itself or also for the valuables inside? Does the policy pay for additional costs such as hotel charges, transportation or other expenses that may occur due to temporary relocation?
3. Compare each policy for detailed clauses on exclusions or limitations. Read the entire policy document when comparing different quotes.
4. See what the deductible options are. They may vary in every policy and increasing the deductible will reduce your annual premium.
5. Compare policy costs which depend largely on location, the quality of your home, earthquake resistance ability and age. These factors will cause a variance in the overall cost of the coverage. A lot depends on the materials used for construction. For example, wood offers better resistance to earthquakes compared to bricks and stones.
6. Compare quotes of private insurance companies with those offered by the CEA. Visit the CEA Web site to learn more and compare different policies. You can also use the site to calculate your estimated annual premium.

Tips & Warnings

• Consider the coverage limit before comparing different policies. You can buy a basic to comprehensive plan depending on your needs.
• Make sure the coverage includes all costs of remodeling or rebuilding your home.
• Discuss earthquake insurance with your neighbor or people living in surrounding areas. They will be able to provide some additional insight.
• Check your homeowners’ insurance policy and see if, by adding a rider, you can buy separate earthquake insurance.