Insurance cover
Sunday, November 13th, 2011Ever since the Japanese earthquake and following tsunami hit our television screens, there’s been slightly more interest in whether earthquake cover is needed in the US. In other words, there’s a temporary outbreak of paranoia, worrying whether such a disaster could ever happen here. For a few months, people will get quotes and talk to insurance agents about the cost of cover, and then interest will all slowly die down again. Even in the US states at risk, less than 10% of the population carries earthquake cover.
Given that California sits on a major fault line, this may seem surprising. But, when asked why cover is refused, most people come up with an entirely rational reply. If there’s a “big one”, this would not simply cause one home to fall down. This would open cracks in the ground and damage all the major infrastructure of roads, bridges, the cabling and piping that brings essential services to an area, and so. There could not be any rebuilding of individual homes until access was restored and the basic services were reconnected. When you look at the deficits being run by many of the at-risk states, there would be serious delays in accessing federal funds and then commissioning the necessary works. So having earthquake insurance on the homes is not going to be much use for months or, indeed years. In some areas where there are landslides or sections of the land fall into the sea, it might never be possible to rebuild on the same sites. This is not to say pessimism is the right approach. Since earthquake damage is usually excluded from the standard policy, you should ask for quotes and decide whether the cover on offer is affordable.