What Policies Cover

Unlike more general policies, earthquake insurance covers major losses. It is usually sold with deductibles equaling 10 to 25 percent of the struc­ture’s policy limit. (On a $400,000 building, for example, deductibles could be in the range of $40,000-$100,000.) The more you pay in policy premiums, the lower the deductible.

You are probably familiar with deductibles on your auto insurance poli­cies, and earthquake insurance deductibles work in essentially the same way. Insurance pays only for damages that exceed the deductible.

But there are some additional factors to consider. Unlike car insurance, which has just one deductible, many earthquake policies treat contents and structure separately. Different deductible amounts or percentages may be applied separately to distinct loss areas such as:

• Contents of the property

• Loss of the structure

• Loss of garages, sheds, driveways, or retaining walls

• Automobile damages incurred during an earthquake

Not all policies are alike. Shop around to get the coverage that best meets your needs.

Note that insurance companies are now applying increasingly tough requirements when writing policies. Most will require an inspection of your property before they will agree to issue a policy.

 

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