YOU ASK:

What is the definition of Earthquake Insurance?

WE ANSWER:

Earthquake Insurance provides protection against the losses incurred due to damage to an insured building (and what it contains) because of an earthquake. The protection may include direct damage to the building structure (such as the collapse of the building) or indirect damage (such as a fire caused by faulty electric lines). The coverage depends on the policy and may vary from one company to another. That is why it is recommended that you check your policy to know what it covers.

Earthquake Insurance is usually an option endorsement to the policy. Most homeowners' and business policies don't cover earthquakes. Earthquake Insurance is required for homeowners whose house is located in an earthquake prone area. This is to ensure that the people who become victims of an earthquake will rely on their insurance instead of government disaster funds.

Earthquake insurance is often very expensive and may involve a high deductible, since the tendency is that only those who live in high risk areas will tend to buy the coverage.

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