California is a beautiful, but dangerous place to live. In the wake of many trying years battling wildfires, it's easy to forget the less predictable natural disaster, "the big one." The destruction of an unexpected earthquake can be devastating, but by protecting yourself and your family with insurance, you can minimize losses.
Insurance companies that sell California homeowners insurance policies are required by law to offer earthquake coverage. Earthquake insurance should provide coverage for your dwelling, personal property coverage, and "ALE" (additional living expense coverage), which can be waived if the covered dwelling is not your primary home.
ALE is useful when damages to your home require that you live elsewhere while repairs are underway. It can cover temporary use of a rental home, apartment or hotel, restaurant meals, relocation and storage, laundry or utility installation costs, but is limited to the reasonable amount of time necessary for repairs or relocation and only pays for extras, not for normal living expenses. Many of us have become acquainted with ALE after our experiences with wildfires over the last few years. If you would like to know more about ALE, read this article.
If you are interested than more than minimal limits, you may be want speak with your independent agent about higher limits or securing a mono-line or “stand alone” policy, which is offered by specialty companies.
Additional Charges and Discounts
Discounts my apply to homes that are retrofitted to strenthen the dwelling and minimize damage caused by earthquakes.
The CA Department of Insurance lists the following retrofitting ideas:
Anchoring a dwelling to its foundation through seismic bolting
Reinforcing and/or bracing the fireplace chimney
Securing and bracing the water heater to the dwelling frame
Installing automatic gas shut-off valves
Installing bracing for sheer walls
Second Hand Damages
Damages like burst water pipes can often occur after an earthquake or its aftershocks, but in these scenarios the earthquake is not the “direct cause” but the “proximate cause.” Even if your normal CA home insurance policy would cover these damages in normal circumstances, the resulting loses are not usually covered unless an earthquake policy is in place at the time of the disaster. Fire is one exception to the proximate cause law, a question we are often asked. Whether or not you have earthquake coverage, your residential fire insurer should cover loses that result from a fire following a quake.
Read your policy carefully, and talk to an agent to double check if your damages are coverd before assuming either way.
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