Risks that are covered under an earthquake insurance policy
Earthquake insurance policy comes under the category of the home insurance policy. Under this kind of insurance policy, you get coverage against losses or damages incurred to your property against damages due to natural calamities like earthquakes.
Your home or other property can sustain significant damage in case of an earthquake. Going for its repair or rebuilding it can cost anywhere from lakhs to crores of rupees. This simply means that an earthquake not only causes damage to immediate property but also causes a significant long-term monetary hardship.
A house insurance policy that covers earthquakes serves as a solid foundation to deal with the risks that are posed by these natural calamities. If you buy an earthquake insurance policy for your home or other property, you get the following benefits:
- Damages and Losses Caused Due to Fire: Fire is a secondary significant risk that can come with an earthquake. These fires can be caused due to short circuits or through electronic connections, leakage of gas, or any other reason. In case of fire, the earthquake insurance policy covers both the house structure and its contents.
- Damages and Losses Caused to the Valuable Items Inside the House: Every household has some valuable items. These can be jewelry and items made up of precious metals. An earthquake protection insurance policy provides coverage for valuable items that are damaged or lost due to an earthquake.
Risks that require extra protection over an earthquake insurance
Besides protection against losses and damages incurred to your property due to a natural calamity, earthquake insurance is not an inclusive insurance policy. The below-mentioned risks are not covered in a standard earthquake insurance policy:
- Debris Removal Cost: An earthquake can cause debris to accumulate and spread on the site of the property. This debris has to be removed as soon as possible. However, debris removal is not covered under an earthquake insurance policy. You will have to bear the expenses of debris removal from your property.
- Damages Induced by Flood: Sometimes earthquake induces flood. The risk that arises due to any such post-earthquake flood is not covered in an earthquake insurance policy.
- Income Loss from Rental Property: If you have purchased an earthquake insurance policy for your rented out property, the policy will not be liable to pay the loss of rental income that occurs due to an earthquake. The policy only covers the loss caused due to damage.
- Expenses of Alternative Accommodation: You may have to opt for an alternative accommodation due to damage in your insured property due to an earthquake. However, an earthquake insurance policy does not cover the expenses that arise due to alternative accommodation.
- Architect or Surveyor Fee: This type of insurance plan can limit the fees that are charged by the architects, surveyors, and engineers up to 3% of the claim amount. If you have to pay fees more than the threshold limit of 3%, then you have to bear it on your own.
- Loss of Earning:There are chances that you may face loss of earning or some other kind of alternative income loss due to the earthquake. However, an earthquake insurance policy does not cover it.
These are the basic points that you must keep in mind while buying an earthquake insurance policy for your property. In addition to this, you must also know that same as other insurance policies like home insurance, earthquake insurance too has deductibles. The deductible is an amount that is deducted from the policy coverage amount.
Wrapping It Up!
Buying an earthquake insurance policy can look superfluous choice to many of you. However, the fact is that an earthquake insurance policy can be of utmost importance especially you are living in an earthquake-prone area.