Okay , so today we are taking a deep dive into something that hits well close to home for a lot of people , especially considering the uptick in natural disasters lately , and that's earthquake insurance .
Speaker 2Yeah , it's definitely one of those things that you hope you never need right , but when you need it , you really need it .
Speaker 1Exactly , and you've sent in a ton of questions about earthquake insurance . So , to help us really get into the nitty gritty , we're diving into some awesome material from Ezekiel H Hudson .
Speaker 2Ezekiel H Hudson .
Speaker 1Yeah , he's with the Hudson Agency LLC and let me tell you this guy is not messing around . His contact info is plastered all over this document . If you need an earthquake insurance expert , he is ready and waiting .
Speaker 2Well , at least he's passionate about preparedness .
Speaker 1That's for sure . So let's jump right into it . I think the most common question we got was do I really need earthquake insurance ? Is this really something I need to worry about if I don't live in , you know , california ?
Speaker 2Right California like earthquake central .
Speaker 1Exactly . But Ezekiel makes it really clear that it's not just about those obvious earthquake prone areas and that's where fault lines come in .
Speaker 2You could be sitting on one and not even know it . It's literally a crack in the Earth's surface and we've got those puzzle pieces right that make up the Earth's crust .
Speaker 1Oh , ok , like tectonic plates .
Speaker 2Right , exactly . And those plates , well , they get a little frisky sometimes and rub against each other .
Speaker 1Yeah .
Speaker 2That's what causes those tremors we feel .
Speaker 1So even if you don't live in a high-risk area , you could still be at risk because of those sneaky fault lines .
Speaker 2Exactly , and it's not just about where you live , it's about how you live too . Think about the age of your home , how it was built . Older homes , especially those that haven't been retrofitted they're much more vulnerable .
Speaker 1That makes sense . So location and the type of building both play a big role .
Speaker 2Absolutely . Now FEMA has these maps earthquake hazard maps which can be super helpful in figuring out your risk level . They're a little technical , I'll admit , but it's worth checking them out just to get a sense of what you're dealing with .
Speaker 1Okay , so you've assessed your risk and you're thinking all right , maybe I do need to look into this earthquake insurance thing . What does it even cover ? Like if the big one hits , what's actually protected ?
Speaker 2So it's more than just like fixing cracks in your walls right , okay . Imagine like your plumbing system goes haywire or your electrical wiring is shot .
Speaker 1Oh wow , I didn't even think about that .
Speaker 2Yeah , earthquake insurance can help cover the damage to those essential systems that make your house livable .
Speaker 1So it's not just about the structure , it's about making sure everything still functions . Okay , that makes a lot of sense . But what about all our stuff inside , you know ? Furniture , electronics , appliances , that vintage velvet painting I'm convinced is going to be worth millions someday .
Speaker 2Hey , you never know . But yeah , all of that falls under personal property coverage , which is a key part of earthquake insurance , replacing everything from your couch to your toothbrush .
Speaker 1Don't forget the velvet painting .
Speaker 2Right , especially the velvet painting . It all adds up so fast and that's where having that coverage can be a lifesaver . Here's another thing to consider what happens if your home ?
Speaker 1is well unlivable after an earthquake . Oh right , where do you even ?
Speaker 2go Exactly . Hotels aren't cheap and finding a rental , especially on short notice , can be a nightmare . And that's where loss of use coverage comes in .
Speaker 1Loss of use Okay .
Speaker 2Yeah , it helps with those additional living expenses temporary housing , meals , maybe even transportation if you need to commute further to work because you had to relocate .
Speaker 1So we've talked about what earthquake insurance covers , but Ezekiel also spends a lot of time in this document on deductibles , and that's where things get a little fuzzy for me .
Speaker 2Yeah , deductibles can be tricky . They're basically the amount you have to pay out of pocket before your insurance coverage kicks in Right , like my share of the responsibility .
Speaker 1Right , it's a percentage of the insured value . Right yeah .
Speaker 2So let's say hypothetically , your house is insured for $300,000 and you have a 10% deductible .
Speaker 1Okay , so $30,000 , that's a big chunk of change .
Speaker 2Right , which is why it's so important to really understand what your deductible is and make sure you can actually afford it if you ever need to file a claim .
Speaker 1It's like finding that balance . You want enough coverage to feel secure , but not so much that your monthly payments are through the roof . And speaking of different levels of coverage , Ezekiel talks about standalone policies versus endorsements , and I always mix those two up .
Speaker 2Don't worry , it's a common point of confusion . Think of it this way . And I always mix those two up . Don't worry , it's a common point of confusion . Think of it this way A standalone earthquake insurance policy is like buying a brand new , heavy-duty winter coat . It's separate from your regular homeowners or renters insurance and it's specifically designed for one thing earthquakes .
Speaker 1So if you're living in an area with a high risk of earthquakes , right on top of a fault line , a standalone policy is probably the way to go .
Speaker 2It offers more comprehensive coverage and higher limits , but of course that also means higher premiums . It's like buying that top of the line winter coat You're getting maximum protection , but it comes at a cost .
Speaker 1Okay , that makes sense . So what about endorsements then ? Are those like the lighter jackets for less intense weather ?
Speaker 2Exactly . An endorsement is like adding a warm liner to your existing coat . You're essentially attaching earthquake coverage to your current homeowners or renters insurance policy .
Speaker 1So it's more affordable , but maybe not as much coverage .
Speaker 2You got it . It's a good option for people who are on a budget or who live in areas with a lower risk of earthquakes .
Speaker 1So it's all about weighing your options , right .
Speaker 2Looking at your risk , your budget and how much coverage you're comfortable with . Absolutely , and don't forget to shop around and compare quotes from different insurance companies . Don't just go with the first one you find . Make sure you're getting the best coverage for your specific needs and , while you're at it , pay close attention to what's not covered . You mean the exclusions Exactly .
Speaker 1Pay close attention to what's not covered , you mean the exclusions .
Speaker 2Exactly . Ezekiel highlights some important ones in his guide . It's like reading the fine print , but it's crucial to understand what your earthquake insurance does and doesn't cover .
Speaker 1So we've covered a lot of ground here , but it seems like most of what we've talked about applies mainly to homeowners . What about renters ? Do they even need to worry about earthquake insurance ?
Speaker 2That's a really good question and you're right . A lot of people think , oh , I'm renting , my landlord's insurance will cover it .
Speaker 1Right , like the building's covered , so I'm good right .
Speaker 2Well , not so fast . A landlord's insurance usually covers the structure of the building itself , but it doesn't cover your stuff .
Speaker 1Oh , that's right , All your belongings inside .
Speaker 2Exactly . And after an earthquake , imagine having to replace everything Furniture , clothes , electronics , kitchenware . I mean , think about how much it would cost to replace even just your wardrobe .
Speaker 1Oh my gosh , it adds up so fast .
Speaker 2It does , and that's why Ezekiel strongly suggests that renters look into getting an earthquake endorsement on their renter's insurance .
Speaker 1So it's like that add-on we were talking about earlier .
Speaker 2Yep , it's generally pretty affordable , especially compared to a standalone policy , and it can give you some peace of mind knowing that you're not on the hook for replacing everything if the worst happens .
Speaker 1That makes a lot of sense . So renters get those endorsements . But what about businesses ? What does Ezekiel say about them ?
Speaker 2Businesses definitely have some extra things to consider , especially if you have a physical storefront , an office , a warehouse , anything like that .
Speaker 1Yeah .
Speaker 2Ezekiel's pretty clear that in most cases a standalone earthquake insurance policy is the way to go .
Speaker 1Because not only do they have to worry about damage to the property itself , but also the potential for lost income if they have to shut down for repairs right , Exactly , and that's where business interruption coverage comes in .
Speaker 2It can help cover lost profits , operating expenses , even payroll . It helps bridge that gap while you're getting back on your feet after an earthquake
.
Speaker 1Wow , this has been a crash course in earthquake insurance and , honestly , I feel a lot more informed thanks to Ezekiel and his expertise . It's definitely one of those things that's easy to put off thinking about but so crucial to have a handle on before disaster strikes .
Speaker 2I agree , and you know it makes you think . We've talked a lot about the financial side of things , the policies , the coverage . But there's a whole other aspect to this the human element . How would you cope emotionally with the aftermath of an earthquake ?
Speaker 1That's such an important point Having a plan , knowing what to do , who to contact that's just as crucial as having the right insurance in place .
Speaker 2Couldn't agree more . It's about more than just finances . It's about being truly prepared for anything .
Speaker 1Well said . A huge thank you to Ezekiel H Hudson and the Hudson Agency for giving us the knowledge to navigate the ins and outs of earthquake insurance , and to you , our listeners , for joining us on this deep dive . Until next time , stay curious , stay prepared and we'll catch you in the next episode .