Farmers Insurance And Earthquake Loss Assessment: Understanding Your Coverage

Earthquakes can cause a lot of damage to your home and your belongings. Standard homeowners, condo, or renters insurance typically does not cover earthquake damage, but you can add optional earthquake insurance. Farmers Insurance offers earthquake insurance as separate coverage in most areas. This insurance can help pay for some of your losses, including structural repairs, rebuilding your house, paying for temporary housing, and replacing your belongings. The cost of earthquake insurance depends on various factors, such as the risk of earthquakes in your area, the materials used in your home, and whether your home has been reinforced or retrofitted for earthquakes. It's important to note that earthquake insurance does not cover all types of damage, and there may be exclusions and limitations to the coverage provided.

Earthquake insurance is separate coverage offered by Farmers Insurance

Farmers Insurance offers earthquake insurance as separate coverage in most areas. You can contact a Farmers agent to review your current home insurance or renters policy and determine if earthquake insurance is available in your area and what the cost would be.

The amount you pay for earthquake insurance is based on several factors, including the risk of earthquakes in your area. Costs are typically lower in areas where earthquakes are rare and higher in areas with more frequent seismic activity. Other factors that can impact the cost of earthquake insurance include the materials used in your home's construction, the age of your home, the average per-square-foot construction cost in your area, and whether your home has been reinforced or retrofitted for earthquakes.

Earthquake insurance can help cover various costs related to earthquake damage, such as structural repairs, rebuilding your house, temporary housing, and replacing your belongings. It is important to note that federal disaster assistance programs may not fully cover the costs of rebuilding after an earthquake, so having earthquake insurance can provide additional financial protection.

In California, earthquake insurance is primarily issued by the California Earthquake Authority (CEA), and you can purchase this coverage through a Farmers agent. If you live in another state, a Farmers agent can help you understand your coverage options and choose the best policy for your needs.

Earthquake insurance covers structural repairs, rebuilding, temporary housing, and replacement of belongings

Earthquake insurance is not typically included in standard home, condo, or tenant insurance policies. Therefore, it is often necessary to add it as an endorsement when you compare quotes.

Earthquake insurance covers the costs of the loss or damage caused to your home and its contents resulting from the shaking of the earth. This includes structural repairs, rebuilding your house, paying for temporary housing, and replacing your belongings. If your house is not inhabitable, you will also receive additional living expenses to cover accommodations while your house is being repaired.

The cost of earthquake insurance varies based on several factors, including the location of your home, the risk of earthquakes in your area, the construction of your home, and the number of floors. The deductible for earthquake insurance is typically a percentage of the total damages, ranging from 2-20%.

It is important to note that earthquake insurance does not cover damage caused by landslides, tidal waves, or tsunamis. Additionally, it does not cover damage to your vehicle caused by an earthquake, which would require separate comprehensive coverage.

Earthquake insurance is relatively expensive in earthquake-prone areas

The cost of earthquake insurance depends on several factors, including the location of the home, the cost to rebuild, the type of construction, and the coverages selected.

• Location of the home: Homes located in high-risk areas will have higher premiums. For example, in California, residents in Los Angeles neighborhoods like Echo Park, Silver Lake, and El Sereno tend to pay lower rates, while those in Mar Vista, Culver City, and West Los Angeles pay higher rates.
• Age of the home: Older homes are generally more expensive to insure as they may not have upgraded safety features to mitigate earthquake damage.
• Number of stories: Multi-story homes are more likely to sustain damage during an earthquake, leading to higher insurance costs.
• Rebuilding cost: The estimated cost to rebuild a home significantly impacts insurance premiums. A higher home value and rebuilding cost will result in higher premiums.
• Deductible: A higher deductible typically leads to lower insurance premiums. Earthquake insurance deductibles can range from 10% to 25% of the coverage limit.
• Construction type: Homes constructed with brick or masonry tend to have higher premiums as they are more susceptible to earthquake damage.
• Soil type: Homes built on sandy soil are generally cheaper to insure than those on clay or rock as sandy soil provides more flexibility during an earthquake.

Additionally, earthquake insurance is more expensive in areas with a higher frequency of earthquakes. For example, California experiences 90% of the country's earthquakes, resulting in higher insurance premiums for its residents.

The high cost of earthquake insurance in these regions often leads to many homeowners forgoing this type of optional coverage. However, it is crucial to weigh the risks and consider the potential financial impact of earthquake damage when deciding whether to purchase earthquake insurance.

Earthquake insurance is not mandatory, even for those with a mortgage

In California, insurance companies are required to offer earthquake insurance to new homebuyers by law. However, this is not the case in other states. For example, in Oregon and Hawaii, two other states prone to earthquakes, mortgage companies will only require earthquake insurance if you live in an earthquake-prone area.

Even if your mortgage company doesn't require earthquake insurance, it's essential to consider the risks of going without. Earthquakes can cause significant damage to your home, and the cost of repairs can be expensive. If you live in an area prone to earthquakes, such as California, Washington, Montana, Idaho, Alaska, Hawaii, and Tennessee, and wouldn't be able to afford to repair your home after an earthquake, purchasing earthquake insurance may be a wise decision.

Before deciding whether to buy earthquake insurance, it's crucial to weigh the costs and benefits carefully. Earthquake insurance can be expensive, with high premiums and deductibles. According to the Federal Emergency Management Agency (FEMA), most potential earthquake insurance buyers are unlikely to experience damage that would exceed their deductibles. Therefore, it's essential to evaluate your level of risk and determine if purchasing a policy makes financial sense for your situation.

Earthquake insurance does not cover landscaping, pools, fences, masonry, or separate buildings

Earthquake insurance is an optional insurance coverage that provides protection against the damage that an earthquake can cause to your home and property. Earthquake insurance does not cover landscaping, pools, fences, masonry, or separate buildings. If you have a shed or other separate structure, it is not considered part of the dwelling.

If you want to protect landscaping, pools, fences, or separate buildings, you may need to purchase additional coverage within your policy. For example, a masonry veneer might be covered if you choose to purchase additional coverage within your policy.

It is important to carefully review your insurance policy to understand what is and is not covered. While earthquake insurance can provide valuable protection, it is important to be aware of its limitations.

Frequently asked questions