Friday, April 18, 2008

Earthquake insurance on your home?

My first thought upon waking to the shake rattle and roll of this mornings earthquake was, "That is soooo cool"! My second thought was "Dang! What did we ever decide about that earthquake option on our home owners policy?"

Fully realizing this would not be a unique idea, I phoned my insurance man, Jeff Burtis of State Farm. We hadn't sustained any damage, but my enquiring mind just felt the need to know how screwed we would have been had the 'ol richter registered a point or two higher.

Mr. Burtis's office informed me that in fact, we did not have the optional earthquake rider. After explaining it, I realized why we turned it down. The way it works (at least at State Farm) is that there is a 5 to 10% of the value of the home deductible before the insurance coverage would even kick in. Therefore, the owner of a $200,000 home would pay the first $10,000 - 20,000 of sustained damage before they would see one nickel from their insurance provider. Additionally, the person I talked to stated that in her entire career she had never seen a claim paid on an earthquake rider. The annual premium for earthquake coverage is an additional approximately $50 - $100 per year.

So I guess I'll just continue to live life on the edge and waive the earthquake coverage. Pardon me while I go find some wood to knock on!


PeoriaIllinoisan said...

If I recall correctly, we are required to have mine insurance aren't we? Apparently there are lots of mining tunnels under the Peoria bluffs. I wish I knew more about that.

Diane Vespa said...

Interesting you should ask this, because I just asked him the mine subsidence question last week on behalf of a client. State Farm automatically puts mine subsidence coverage in all of their policies. However, the insured can opt out by request. The most prudent thing to do would be to just leave well enough alone and leave it in there, since no one really knows the location of any of these underground mines.

Denali said...

Well said.

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