Homeowners Insurance Earthquake Coverage
Homeowners Insurance Earthquake Coverage: After the horrifying earthquakes in Chile and Haiti in the year 2010, many insurance companies have raised the premium for earthquakes nearly doubling the amount. One insurer raised its premium from $2500 to $7100 per year immediately after the earthquake, which tripled the amount of one person’s premium.
The same situation occurred with homeowners insurance and flood insurance in Florida and other hurricane-prone states after Hurricane Katrina hit New Orleans and three other major hurricanes hit Florida in the year 2005. You can check earthquake insurance premium calculator online.
Shockingly, State Farm, a group of insurance and financial services companies in the United States, has dropped 125,000 insured along the coasts of Florida. People who live within five miles of the coast can get insurance only from Citizens Property Insurance Corporation (non-profit government-sponsored insurer) of Florida.
Around $10 billion out of $85 billion were used towards people who were uninsured or have an uninsured policy. The earthquake of Chile was the strongest earthquake in 100 years which cost insurance companies from $4 billion to $7 billion. To cover this loss, insurers have raised their premium rates, according to Insurance Service Office.
It added that the insurance industry has paid more on claims for an earthquake than it had collected in the past 30 years in the form of premiums. Therefore, they increase deductibles from 10% to 15% and premium rates by 200%.
There is no nationwide database of earthquake insurance rates. Every insurer has different policies and treats its customers with its own laws and the rate of earthquake insurance stands around $300 or $400 per year. Homeowners’ Defense Act currently has 800,000 policies in force with $600 million in premium revenue and almost $10 billion in claim-paying capacity.
According to one report, about 5,000 earthquakes strike the U.S. each year, and to overcome from their damage, each one should be covered with significant insurance coverage.
When one desires to buy insurance for this, he must know some key factors like the features and price of policies, the amount of equity for the home, fault zone, covering properties, eligibility criteria, and type of home construction. Generally, most of the policies come with 10% to 15% deductibles and even higher deductibles that help in saving more money.
Missouri, New York, and California are the city in the United States which experienced a major earthquake throughout the years. There is more possibility of huge damage if earthquake hit these cities. Read more articles on rozyjos.
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