As most of us whom live on the east coast are aware, last week an unusual earthquake hit the state of Virginia which was felt as far north as Niagara Falls Canada. The event left many on the east coast engrossed in uncertainty of not knowing when this type of event may strike again and what damage they could incur during the next event. In addition, these same residents are now thinking about earthquake coverage as one of the best ways of being protected from this natural calamity. As a resident of Pennsylvania myself, I can tell you how surprised I was when this event was felt in the offices of InsureDirect.com. Both my wife and I where speaking about Earthquake coverage for our home which is close to our offices. Although hardly ever purchased, earthquake coverage is readily available and incredibly affordable in Pennsylvania, New Jersey, Delaware and Ohio. Depending on the carrier which underwrites your homeowners insurance, most customers can bind earthquake coverage through an endorsement to their policy or as an additional feature added into their Auto and Home Insurance package.
The premium varies with regard to location, the Home or Auto insurance company as well as the amount of coverage requested. Older buildings, for example are more costly to insure than newer ones due to the fact that they are much more vulnerable to natural occurrences such as earthquakes and wind events. Rates for wood frame structures are much lower in comparison to brick buildings because they are much stronger to endure quake stresses. Insurance Grades have been set up on a scale of 1 to 5 for different U.S regions depending on how likely they are to have an earthquake occurrence. These are the parameters that are used to determine the rates for each region.
Insurance companies often make an analysis of how a dwelling performs under certain exposures. The primary category is how a risk is situated to an area which experiences natural calamities. It’s good to note that earthquake risks in Ohio is not as considerable as California. With that said, this does not decrease the rates for this risk category. Marshall & Swift/Boeckwith which is the Homeowners Insurance Risk Calculator most agents (including InsureDirect.com) use to estimate the amount of risk showed a dramatic increase in Ohio construction costs between 2001 and 2006. These rates have remained stable since but still represent the cost of replacement from 2006.
Calculations for earthquake insurance are basically carried out on a per $1000 of replacement cost coverage. For instance, a House in the Pacific Northwest area is likely to cost at a range of one to three per $1000 in terms of coverage. This rate may be fifty percent lower for a house on the East Coast. On the same vein, brick home is likely to coast approx $3 to $15 per $1000 in Pacific Northwest. This could be at a range of 60 to 90 percent lower when you move to New York.
Earthquake coverage is found to be of great significance to those who feel a total dwelling loss is more than possible. Annual coverage in the states of PA, NJ, DE and OH costs about $125.00 for frame structures and masonry or brick costing a little less because they can withstand the shaking and ground shifting of an earthquake shake. You can opt for an earthquake endorsement since it comes with a 5-10% deductible. The coverage is now available through InsureDirect.com along with Car Insurance, Motorcycle and Homeowners Insurance at very affordable rates.
Michael E. Dortch
President & Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania 19446
(800) 807-0762 ext. 602