Earthquake
Insurance
If you live in the Bay Area you most likely know of and have felt the danger of earthquakes. San Francisco has seen massive damage caused by earthquakes more than once in the past century. And while the Bay Area has felt smaller shakes every now and then, residents are being warned of the very real possibility of a massive earthquake in the not so far future. The Bay Area is just one of the locations in the United States that have seen and endured massive earthquake damage. All 50 states have seen damage from earthquakes: In 2006 Hawaii felt the shake of a 6.6 magnitude earthquake, Southern California felt the Northridge shake, recorded at 6.7 in 1994. You may even remember the earthquake that registered at 9.2 in 1964 that shook Alaska and caused tsunami damage on the west coast. These examples do not even mention the earthquakes around the world that have hit in the past 10 years.
As you can see, earthquake insurance is much more important than any of us realize. With the amount of potential damage an earthquake can cause, it is wise to obtain or at least consider the additional insurance policy. Earthquake insurance is available via private insurance companies. In California, one of the more popular organizations offering earthquake insurance through approved insurance companies is the California Earthquake Authority (CEA), a privately funded but publicly managed company. Keep in mind that there are still different earthquake policies covering different amounts, so ask your insurance agent to explain the entire policy to you. To get some more information about CEA's insurance policies visit their official website. Here are just some earthquake insurance basics:
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Shaking, cracking, fire, water damage caused by earthquake activity is covered
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Average deductible cost is 10-15% of replacement value.
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In California insurance companies are required to offer earthquake insurance within 30 days of applying for homeowner's or condominium's insurance.
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9 out of 10 of the most expensive earthquakes in the United States occurred in California
Flood
Insurance
In the United States, the horrifying reality of expensive flood damage became quite clear during the disaster of Hurricane Katrina. Thousands of families were displaced and experienced the inability to rebuild their homes due to substandard insurance policies. Since then the government has attempted to raise public awareness about the need to acquire flood insurance, especially for those closer and most prone to disaster areas.
For those who hold standard insurance policies, in the event of a flood, the damage caused to your home would not be covered by your policy unless you have paid an additional premium for flood coverage. With additional flood insurance, your expenses to rebuild your home as well as the cash value (replacement cost minus depreciation) of your personal belongings are covered. Reasons to purchase flood insurance is if your home, condominium, or co-op are located near the ocean, or in the path of rainwater, melting snow, or located at the bottom of a steep hill. Here is some basic information regarding what standard and add-on flood insurance offers you:
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Covers building damage including structural, furnace, water heater, flooring
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Covers personal property including furniture, appliances, clothing
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Covers expenses to protect home from flood including sandbags
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Covers clean-up expenses including debris and sand removal
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Structural damage for residential buildings max out at $250,000 in coverage
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Structural damage for non-residential buildings max out at $500,000 in coverage
Keep in mind that if you do apply and buy a flood policy you will have to wait a full 30 days before it will go into effect. So make sure to obtain the insurance well before any known hurricane or flooding warnings, otherwise it may be too late.
Mold
Insurance
A sharp increase in the demand for replacing mold-damaged areas in the years 2001-2003 quickly convinced insurance companies, in most cases, to restrict if not eliminate mold coverage in standard insurance policies throughout the country, especially in California and Florida. Insurance companies have long created an insensitive reputation for themselves and the elimination of mold under standard policies is just another piece of evidence. While mold generally does not create enough damage to require massive payouts, adding on mold insurance to your policy can become quite costly. We do not say this very often about insurance since we would rather be safe than sorry, but in many cases the expensive coverage and deductible are not worth the actual expenses to repair the damage to the house. You may just be better off without obtaining mold coverage, unless your home's location is prone to toxic mold.
Condominiums
and co-ops are also homes to millions of people and similarly it
also requires its own set of add-on insurance policies. In addition
to the above mentioned insurance policies covering earthquake,
flood, and mold
damage, it
is also
wise to consider obtaining
the following:
Water back-up
If your sewage, water heater, or plumbing fails in any way, most likely than not in a condo or co-op complex is you will damage your neighbor's unit as well. In these cases your insurance policy can cover the damage done to a neighbor's unit as well as the damage to your own home. This feature in an insurance policy does not usually come standard.
Floater or Endorsement
If you own jewelry, collectibles, antiques, or other personal possessions that is extremely valuable, you may want to obtain more coverage to insure those belongings in addition to the standard insurance covering the rest of your personal belongings.
Unit Assessments
In the case that certain common areas endure damage, in many cases the Homeowners Association will require the homeowners to share in the cost of repair. In these cases having additional coverage to pay for those charges would be helpful especially if the damage to the common area is extensive.
