Earthquake and Flood Insurance
Earthquake Home Insurance
If you are covered for the peril of earthquake in California, the law requires that your insurer also offer you a minimum of $1,500 in loss of use benefits, specifically for additional living expenses, in the event your home becomes uninhabitable because of the earthquake. Since there is an ongoing challenge by the major insurance carriers in regard to requirements for earthquake insurance, you would be wife, if you live in areas subject to this kind of loss, to check your policy for the minimum amounts your home insurance company will pay.
In 1996, legislative developments in the State of California have created the California Earthquake Authority (CEA). This plan, underwritten by California taxpayers, has established a $10.6 billion state managed earthquake insurance program. This program is akin to the federal government sponsored flood insurance coverage program offered in flood potential communities.
Earthquake insurance coverage has always created a number of proponents, detractors and problems, and this new program is no exception. Premium rates will vary throughout the state based on high risk of earthquake prone areas (i.e., San Fernando Valley, San Francisco, etc.). The major insurance companies have also negotiated an exit clause in the agreement which allows them to drop coverage altogether should the program prove unsuccessful.
Flood Insurance
Under homeowner policies, flood, overflow of streams and other bodies of water, tidal waters, waves, spray and a wide variety of other water-associated damages are excluded from any coverage whatsoever. Until 1968, virtually no flood insurance of any kind was generally available. Finally, the federal government, through the National Flood Insurance Program, stepped in with a subsidized program which offers limited amounts of flood insurance in certain areas through selected insurance companies.
The National Flood Insurance Program, administered by the Federal Emergency Management Agency (FEMA), currently offers flood insurance through the federal government and 85 private insurers. To qualify, homeowners must live in one of the 18,300 flood-prone communities that have taken specific steps to control floods. Rates vary according to the structure of the house and its vulnerabilities.
Please take note: Homeowners that wait for a “flood alert” before getting insurance from the National Flood Insurance Program administered by FEMA will encounter a five-day waiting period between the times of purchase of the policy to the time the coverage becomes effective.
Homeowners Insurance Quotes
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