How to Shop for Earthquake Insurance (9)
Shopping for earthquake insurance can be a challenge, especially if you don't know where to start. This article will get into a few points that'll help you find an earthquake insurance policy that suits your needs best.
Starting with an insurance broker is always recommended. Insurance brokers have access to multiple insurance carriers, many of which have specialty appetites that include earthquake. Because a broker has access to more than one company they are more likely to give you unbiased options versus captive agents that can only offer you one rate.
See if it makes financial sense to retrofit your property. Whether you own a hotel building or a small 600 square foot rental home a simple retrofit can save you as much as 50% on your insurance premium. Do a quick search online and find out how much it costs to retrofit your property, most retrofitting companies offer free estimates. Keep in mind that you retrofit your property for the purpose of protecting it in the event of an earthquake, not just for a lower insurance premium.
Many agents will exclude building ordinance or law coverage to keep your quotation price low. If you purchase a policy that excludes this coverage you'll be financially responsible for all new building code upgrades made mandatory by your state in the event of a loss. This may not be much for a property built within the last 10 years but an old property could have hundreds of required building upgrades.
Ask for multiple deductible options. The deductible your quotes have will drastically affect your annual premium. Ask your insurance broker to provide quotes with deductibles starting at 5% going up to 25%. The higher your deductible the lower your premium will be, it should be a reasonable amount you can come up with in the event of a loss.
Get quotes with and without earthquake sprinkler leakage. This coverage option can add a few thousand dollars to your premium. An extra thousand dollars can be a dealbreaker for anyone shopping for insurance. Although you may have fire sprinklers, earthquake sprinkler leakage me not fit in your budget. In the event of a major earthquake a basic policy without earthquake sprinkler leakage could be enough to save you from bankruptcy.
These steps should help you in your search for earthquake insurance. Remember every property is different and you'll want to consult your agent with questions about coverage, exclusions, etc.
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