Buying Your Earthquake Policy from A Company That is Not Your Primary Insurer
A brochure arrives in the mail offering you the opportunity to buy earthquake insurance from a company that is not your primary insurer for a property.
Such policies are called “stand-alone,” meaning they are offered by specialty insurance companies who do not require you to purchase your primary homeowners insurance from them, too.
Sometimes these policies are a good value because they are offered by companies specializing in quake insurance that are willing to lower costs and take higher risks than bigger companies.
If you are tempted by such a policy, review its listing on http://www.insure.com to make sure the company behind it is reputable and solvent. Also, be sure to compare what it offers against the riders you can add to policies you already have in place. In many cases, it is more economical to expand your current policies than to add a new one.
A case study you can profit from . . .
California Earthquake Coverage. A policy to protect a single-family home and its contents from earthquake damage is expensive, typically on the order of $1,300-1,400 per year. Coverage for apartment buildings, office buildings, and retail complexes is even more costly.
In California, insurance companies are required to offer earthquake insurance to homeowners that covers the dwelling, personal property (valued at not less than $5,000 or 10% of the covered dwelling loss), and additional living expenses (ALE) of at least $1,500.
ALE covers living expenses for homeowners who have to live in hotels or other temporary quarters in the aftermath of a quake. It may also cover such expenses as restaurant meals while you are unable to live in your residence. Accordingly, ALE coverage is probably not necessary if you or your family will not occupy the property that you wish to insure.
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