With its high risk of major disasters, you may wonder why California has lower-than-average homeowners insurance rates. The answer is that many of the top causes of disasters that occur in this state are not covered by most homeowners insurance policies .
Every year, wildfires erupt in California. In recent years, these fires seem to be getting worse, tearing through neighborhoods and destroying homes. Homeowners who live in areas that have a high risk of being affected by wildfires are finding it hard to find a homeowners insurance company that will cover them, and when they do, the policies offered often exclude coverage against fires.
Some residents are able to purchase a separate fire insurance policy. These policies often have a higher deductible and can be fairly expensive. Property owners who are unable find affordable coverage, or who are deemed uninsurable, can buy into the California FAIR plan. This state-sponsored program can provide up to $1.5 million in structure and contents coverage.
A local independent insurance agent will be well aware of the fire risks in your neighborhood and can provide advice and help you find the right coverage so that you do not need to worry about losing everything if a fire takes out your neighborhood.
Some residents of California are prone to flood damage, but this damage is not covered by homeowners insurance. According to FEMA, as little as one inch of rainwater in your home can cause up to $25,000 in damage in a typical home.
A local independent agent can help you assess your flood risk, and if you feel that it is significant enough to require coverage, can help you purchase an affordable flood insurance policy.
Flood insurance takes 30 days to go into effect, so you should not wait until heavy rains are imminent to purchase a policy.
California is known for its risk of earthquake and tremor activity. This is especially true for residents who live close to the San Andreas Fault. Earthquakes can cause significant damage to area homes, damaging structural walls and foundations as well as causing damage to personal property inside homes.
Earthquake damage is not covered by homeowners insurance. To be covered, you will need to purchase a separate earthquake insurance policy, or, if your homeowners insurance offers it, an earthquake coverage endorsement.
This insurance can cover the cost to repair, rebuild, or replace property that has been damaged by an earthquake. It can also cover debris removal and clean-up costs. Talk to a local independent agent to learn more.
When heavy rains fall in California, the ground can easily become saturated and mudslides can occur. Mudslides and landslides can significantly damage your home and property, but this hazard is not covered by homeowners insurance.
Fortunately, you can find insurance against landslides and mudslides to ensure that this disaster does not cause you significant financial harm. A local independent insurance agent can help you assess your risk, and can then find you a suitable policy if you are interested in supplementing your home insurance with this coverage.