Friday, April 05, 2013

Shake, Rattle, Roll, Insure - UPDATE FROM DOWN UNDER

[Scroll down for update - HGS]

The Insurance Information Institute has a timely reminder:

Earthquake Insurance Is Not Just For Californians; Quakes Are Possible In Many Areas And Can Occur At Any Time

Here in Ohio, we're vulnerable to the New Madrid Fault, but there are lots of others that could affect any of the 58 states. And as the III folks remind us, "[e]arthquakes are not covered under standard U.S. homeowners or business insurance policies. Coverage is usually available for earthquake damage in the form of a supplemental policy from private insurance companies."

I checked with my own carrier, which is one of the few that does automatically include it, but many (most?) others don't. The coverage is usually available as a rider (for an extra charge).

And why would you even consider this coverage?


"Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions. It may cover increased costs to meet current building codes and costs to stabilize the land under your home. Earthquake insurance covers debris removal and pays for extra living expenses you may have while your home is being rebuilt or repaired."

That help?

If you're not sure whether or not you have this potentially critical coverage, best check with your homeowners insurance agent soonest.

UPDATE [Post originally published 4/4/13]

New Zealand blogger (and FoIB) Russell Hutchinson offers some first-hand knowledge on why this kind of cover can be so important. His insights are based on experience from friends and colleagues in the industry dealing with Christchurch (New Zealand's second largest city, which experienced a major earthquake in February, 2011):

This is a really important issue - as thousands of homeowners in Christchurch have found out over the last two years.

And it's not just the need for *some* cover, but to look particularly carefully at any state cover or assistance offered. It is easy to get lulled into a false sense of security when the state says 'yes we cover your land value' and the insurer says 'we cover your home' - what if you have a home that is relatively undamaged, sitting in the middle of land that has been 'red-zoned' - condemned for future building. That's a cover gap. That has happened to a good number of Christchurch homeowners.

Then there is the business cover - you need to contemplate longer periods of business interruption cover for earthquakes than you do with fire risks. Allow more than the 6 months typically taken - consider a year.

Then there are other small fish-hooks: can you claim for property as a loss when it is undamaged, but unrecoverable, because civil authorities do not permit access to a dangerous area? That's another big issue.

All told - look hard, and talk to your insurance adviser.

Thanks, Russell!
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