Many of us have experienced that heart-stopping moment when the ground begins to shake—that one thing we thought we could count on was terra firma and now we can’t even count on that.
What can you do? What precautions (other than relocating) can you take? Would this be a good time to review your insurance coverage? Of course!
Typically, unendorsed commercial property and homeowners (including renters and condominium owners) insurance forms will not cover earthquakes. Nor will they cover many other forms of earth movement, such as mine subsidence.
Fortunately, earthquake insurance is available.
Allied Public Adjusters is licensed in the states of Washington, Utah, Nevada, Arizona, and California, among others. In the first four of those states, earthquake insurance is available for both commercial and private property. No, it’s not exactly cheap, but then offset that with the cost of rebuilding without any insurance and suddenly the cost is put in perspective. And, with regard to Washington, remember Mt. St. Helens? Earthquake coverage will also cover earth movement caused by land shock waves. Contact your insurance professional to determine if the insurance coverage is right for you.
And then we come to…. California. California has ostensibly two options; well, it has only one in some instances. First, for commercial property owners, coverage is generally available through your insurance provider. Typically, an endorsement to your commercial policy will cover earthquakes and volcanic eruptions. All aftershocks or eruptions within a specified period will be considered a single earthquake or eruption, and therefore covered. If you do not have commercial earthquake coverage, and an earthquake occurs, you should still have coverage should that earthquake result in fire or explosion. And, if a volcanic eruption results in building glass breakage or fire, that loss is covered. There is more to consider; be sure to read your policy.
Now we turn to California homeowners. And here is where you, as a homeowner, might not have an option. California has set up the California Earthquake Authority (CEA). It is this entity that has drawn up earthquake coverage forms used by many insurers. Here is where you must do some legwork. Not all insurers licensed to do business in California will offer insurance policies drawn up by themselves. If an insurer sells policies drawn up by the CEA, then it is forbidden to offer its own product for sale. (Note, the CEA does not offer commercial earthquake insurance.)
If your homeowners carrier does not offer the CEA policy, then you should be able to purchase whatever earthquake coverage endorsement is available through that carrier.
There are some things to be aware of with the CEA forms:
1) You cannot buy just a CEA stand-alone insurance policy. You must have a homeowners policy (or similar coverage, such as a dwelling fire policy) in place. The reason for this is that the CEA policy covers damage caused by earthquake, period. Say an earthquake damages your home, but just one wall is cracked (fortunately). But if that quake causes a gas line to rupture with the result your house burns down, the CEA form will cover only the wall (provided damage exceeds the deductible), while your homeowners policy covers the resulting fire.
2) The layout of the CEA policy is different from, say, the standard homeowners forms most are familiar with. For example, Coverage A refers to the dwelling, but Coverage B refers to extensions such as walkways, drives, patios, pipes, etc. The declarations page should indicate coverage for both A and B; if not, then there is coverage only for B. If contents coverage is desired, then coverage C must be indicated (but there is no breakage coverage for fragile articles).
3) Coverage for any and all chimneys is limited to $10,000.
Confused enough already? Here are some web sites that might help. If you look at the California Dept. of Insurance site, there is a list that will tell you if your insurer offers its own, or a CEA policy. The first site is the California Earthquake Authority; the second is the California Department of Insurance.