Preferred Financial Group

"We listen, we educate, then we perform like no one else in the industry."


Frequently Asked Questions

"Should I Have Earthquake Insurance?"


If you can’t sleep at night worrying about an earthquake destroying everything you have, you probably need the insurance. Anything short of that and the decision becomes a bit more objective. But you need to know the basics.


Things to consider:

    • Most homeowner’s insurance policies do not provide coverage for earthquake damage. If it is protection you want, a separate policy is required.
    • Typical deductibles are written as percentages of the loss and generally range between 10% and 15%. Differing from homeowner’s and automobile policies that set deductible as a specific dollar amount.
    • The insured value of your dwelling as per your existing homeowner’s policy will be the same value used in your earthquake policy, meaning if you are underinsured on your homeowner’s policy you will be underinsured on your earthquake policy as well.
    • It is very important to estimate your potential loss in the event of a catastrophic earthquake. Doing so might even assist in your decision to purchase earthquake coverage or not.  Here are a few things to consider:

- Equity in your home (estimated home value minus mortgage balances)

- Replacement cost for household/personal possessions subject to loss.

- Temporary living expenses while waiting to rebuild your home.



Mike and Tori bought their home in the Bay Area over 5 years ago and thought they were adequately covered when they purchased a standard homeowner’s insurance policy as required by their lender. Fortunately for them, when an earthquake hit their area there was no damage to their property but others were not so lucky. Many of their neighbors suffered major damage. Unfortunately some were not covered and had to adsorb the entire loss themselves while other had earthquake coverage.