If you’re on the East Coast today, earthquake insurance probably moved up higher on top of your subjects to discuss with your independent agent. Yesterday’s earthquake centered in Virginia was a wake up call. How many business and individuals have earthquake insurance policies do you think that live along the Eastern seaboard?
The East Coast is generally not afflicted by earthquakes. Hurricanes and blizzards are more on our mind when it comes to disasters. But, the 5.9-magnitude quake was felt in the Carolinas, Virginia and several other Eastern states, including New York. I definitly felt it, and thought the building was falling apart.
Many homeowners may be curious as to whether earthquake damages are included in your home insurance policy. Don’t bet on it. In New York, where tremors were felt, earthquake insurance is specifically excluded from standard homeowners’ policies. This is usually true even in states more commonly hit by earthquakes. Each state is different so contact your agent immediately. This is another reason to have that free cup of coffee with your agent I advocate.
In California, homeowners aren’t necessarily mandated to have earthquake insurance. However, residential property insurance providers are required under law to offer earthquake coverage to interested homeowners. This is not the case in most states.
Most homeowners don’t buy earthquake insurance policies. In 2007 New Yorkers only spent $15 million out of around $3.9 billion in insurance premiums for earthquake insurance, according to the New York State Insurance Department.
The cost-benefit analysis is quite common among homeowners. Many likely concluded that earthquake insurance on the East Coast was frivolous. After all, there is little history of big quakes hitting states like Virginia. But, this recent earthquake helps reminds us that natural disasters can strike most anywhere.
Again isn’t time to quit waiting to call your agent and shake his tree, before something else shakes yours?