Earthquakes in Central Arkansas and Does your Homeowners Insurance cover you?
I don't know if any of you felt the 4.7 Magnitude earthquake that hit Central Arkansas last night at 11pm. I sure felt it...So of course my first call was to my Insurance Agent, regarding wether my home is covered or not under my current home owners insurance policy.... You would be surpised to find out that my home owners insurance doesn't cover any earthquake damage...So i did some research to help you the consumer know more about Earthquakes and how it affects you if the BIG ONE Hits Central Arkansas... If you are looking to purchase a home in Central Arkansas and would like more information on how to get started go to www.yourexitrealtor.com to get started today...Sign up for my Free Montly ENewsletter today at www.yourexitrealtor.com...
Possibly the most important thing to know about earthquake insurance is this: A basic homeowners policy does not cover earthquake damage. Even if you don't live in an area where earthquakes are common, it's possible you might need earthquake insurance.
Earthquakes have occurred in 39 states since 1900, and about 90% of Americans live in areas considered seismically active. Yet only a small percentage of people purchase earthquake insurance.
Even in California, where earthquake fears are a daily fact of life, only about 12 percent of homeowners have earthquake insurance, according to the California Earthquake Authority (CEA), down from 30 percent in 1996 when the state legislature created the CEA.
Each year, more homeowners get rid of earthquake coverage than buy it because, according to consumer groups, they believe the policies cost too much and cover too little.
According to the U.S. Geological Survey, there is a 70 percent probability that one or more damaging earthquakes of magnitude 6.7 or larger will strike the San Francisco Bay area during the next 30 years. (A magnitude 6.7 earthquake is equivalent to the 1994 Northridge, Calif., earthquake that killed 57 people and caused $20 billion worth of damage.)
Homeowner, condo and rental insurance policies do not cover damage caused by an earthquake, but coverage can be puchased as an endorsement or a separate policy. Earthquake insurance can be quite inexpensive depending on where you live. Contact your insurance agent or company to find out what the costs would be for your home.
Not surprisingly, Californians buy the most earthquake insurance, but earthquake insurance has been sold to residents of all 50 states.
The Earthquake Education Center at Charleston Southern University claims there's a 40 to 60 percent chance of a major earthquake somewhere in the eastern United States in the next 20 years. That has prompted the South Carolina Insurance News Service to recommend residents of that state consider purchasing earthquake policies.
The New Madrid Fault, which runs through Arkansas, Kentucky, Missouri and Tennessee, also has insurers worried. According to the Insurance Information Institute, there's a 40 to 63 percent chance the region will suffer an earthquake with a 6.0 magnitude in the next 15 years. The availability of earthquake coverage has become an issue in some regions of those states. For those who don't remember, which would include anyone not alive in 1811, an earthquake struck the New Madrid area with enough force to change the course of the Mississippi river and ring church bells on the east coast.
"The potential magnitude of a catastrophic New Madrid quake dictates that we approach the preparedness on a regional basis," says W.R. Padgett, board chairman of the Central United States Earthquake Consortium. "No one state can possibly begin to address all the issues.
What does earthquake insurance cover?
Ideally, your earthquake insurance policy covers the cost to replace or repair your damaged property. There are several options to consider when picking a plan, including:
- Does the policy cover only the dwelling? Are accessory structures, such as garages, also included?
- Will your policy pay for the contents of your home and for additional living expenses if your home is badly damaged or destroyed?
- Are there any exclusions or limitations to coverage?
- What deductible must you pay before the insurance kicks in?
How much does earthquake insurance cost?
Earthquake insurance rates are determined differently by each insurance company and can vary widely depending on several rating factors.
Generally, older homes cost more to insure than new homes. Wood homes get better rates than brick ones because wood tends to withstand quake stresses better.
I hope this article helped you find some answers as it did for me...
Remember www.yourexitrealtor.com for all your real estate needs in Central Arkansas...