WESTWAYS: Why is earthquake insurance needed?
Glenn Pomeroy: Most homeowners policies totally exclude damage caused by shaking from an earthquake. The only way to insure your house from earthquake damage is through a separate earthquake policy. The federal government may provide disaster assistance with low-interest loans and other types of assistance, but they won’t come in and rebuild homes after an earthquake.
WW: What is the insurer’s role?
GP: The CEA doesn’t have insurance agents or claims adjusters. Participating insurers handle all customer-service functions. To buy earthquake insurance, you call the company that insures your house and, if it’s a CEA member company, you can buy a CEA policy through it. If there were a major earthquake, your insurance company would send out its adjusters, who are trained to respond.
WW: Does the CEA policy cover everything that the homeowners policy covers?
GP: No. The CEA policy is a typical catastrophe policy of basic coverage and a high deductible that’s designed to help your family recover and rebuild. It covers the replacement cost of your house as determined by the dwelling coverage limit in your homeowners policy and provides some limited coverage for the contents of your house. It does not cover property like swimming pools or fences. If it covered everything your homeowners policy covered, the premium would be much higher. The CEA program is intended to offer insurance that is as affordable as possible to help someone recover from a major event.
WW: Why don’t more people buy earthquake insurance?
GP: Oftentimes people mistakenly think their homeowners policy provides coverage, or they think earthquake coverage is too expensive. But consider: What’s your major asset? It’s your home. So what’s the cost of not being protected? When an uninsured residence is destroyed, everything can be lost.
Read more: http://www.calif.aaa.com/westways/2012/01-02/Pages/standing-on-solid-ground.aspx?zip=92626
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