What You May Not Know May Shake You Up

Insurance and earthquakes

November 28, 2008
By Kim Hall
Malvern Daily Record, Arkansas

In light of the recent earthquakes in Hot Spring County and surrounding areas, the Malvern Daily Record has talked with some insurance agents in the area to find out what is covered if you should experience any damage to your home due to an earthquake.

An MDR reporter spoke with Marla Gregory with Farm Bureau Insurance in Malvern about Homeowners insurance and earthquakes.

When asked if a regular homeowners insurance coverage would cover damage to your home in the event of an earthquake, Gregory stated, “A regular homeowners' policy would not cover any earthquake damage. To cover earthquakes, you have to take out a separate Earthquake policy.”

Earthquakes are not covered as Acts of God, like tornado's, lightning, wind or hail damage are in a regular homeowners policy. Gregory stated “We have written quite a few earthquake policies lately.”

Joe Groover with State Farm Insurance here in Malvern told us that a standard homeowners policy does not cover earthquakes. Unlike some other insurance companies, State Farm does not require a different policy just for earthquakes.

State Farm adds earthquake insurance to you regular homeowners policy, with just an addition of an endorsement. The endorsement is usually 5% of the amount you have insured. Which adds $50 -$60 a year to the premium for a $100,000 home. Mr. Groover stated that they have had some recent inquiries on earthquake insurance in the last few weeks.

Tony Jenkins with Malvern Insurance stated “The insurance companies we deal with have an earthquake policy included into the standard homeowners policy.

You have to sign a waiver if you don't want to include the earthquake insurance.” Tony stated, and that at any time, you can come back and add the earthquake insurance to your regular policy.

He stated that you are not automatically covered if you have just a homeowners policy without the earthquake addendum. If you want to add earthquake insurance it would cost around $1 per $1,000 of coverage. For example a $100,000 home would cost about $100 a year for earthquake insurance.

When asked if they have had any recent inquiries on earthquake insurance, he stated that they have had only one person in the last few weeks in concerning earthquake insurance.

If you have an addendum for Earthquakes then you are safe if you should experience any damage to your home or property. Unlike Californian's we never thought that we may have to worry about Earthquakes. We here in Arkansas have always worried about Tornado's, Flooding and other natural disasters, but never Earthquakes.

Since the recent increase of earthquake activity in the area, insurance may be something to look into.

http://www.malvern-online.com/content/view/126540/92/