You know, I’ve got a lot of insurance. I’ve got auto insurance, homeowners insurance and life insurance. While that seems like a lot of insurance, I don’t have earthquake insurance. For those of you living in the midwest, you probably are saying to yourself, “yeah, so what”. Well, as much as I’d like to say that too, I have to face the fact that we live in Seattle. We’ve had a little bit of shaking over the last 10 years, but nothing that was terribly damaging. The experts think we are going to have a doozy here sooner or later.
So, it could happen at any moment. Or, it might not happen for a long time. Because I don’t know which, we’ve been considering getting earthquake insurance. I called today to find out how much it costs. Here’s what they told me:
Earthquake insurance has a pretty large deductible. It comes in a few flavors. You can get a policy with a 10% deductible, 15%, or even 20%. What this means is that if your house is damaged, you have to cover the first 10% of the value of the home before the insurance starts paying out. So, for a house like mine, that means I would have to come up with $30,000, and then if damages were higher than that, my policy would pay out. Yikes. $30k. Realistically, because the policy that comes with a 10% deductible is over $500 per year, I’d probably opt for the 15% policy. That means I’d have to come up with $45k in the event of a disaster. That policy would cost me nearly $400 per year.
So, while I thought it would be an easy decision before I called, I now have found myself mulling it over a bit more. What would you do?
$400 per year to give me insurance for any damages over $45,000 in the event of an earthquake. I wonder how bad the earthquake would have to be to get the damages up over $45k. I think the house would just about have to come all the way down and be inhabitable in order for this policy to make sense.