Business owners and landlords work hard to fight against risks to their properties. Commercial insurance policies protect against many types of property damage, but some types of natural events and disasters are not covered under standard commercial general liability policies.
In fact, many business owners fail to think of earthquakes as a possible risk to their properties. By some estimates, nearly half of all Americans are at risk of experiencing an earthquake. Earthquakes can cause significant damage to any type of structure.
If your business or property is located near fault lines, earthquake insurance coverage is a must. Research from the U.S. Geological Survey suggests that an earthquake with a magnitude of 6.7 happens approximately every six years in California.
For properties in the Golden State, earthquake insurance helps to protect investments. In many areas of the country, earthquakes are very rare. But in California, they are quite common.
Commercial Property Insurance is Not Enough
Some business owners, landlords, and HOAs think that property insurance covers natural disasters. This is a misconception. In fact, your commercial property insurance policy likely will not cover damage from flooding or earthquakes.
There are cases in which a standard insurance policy will cover damage that results from an earthquake. But this damage must be the result of a distinct occurrence that followed the natural event.
For instance, suppose that an earthquake hits your business and a pipe bursts as a result. If this happens, your commercial property insurance may cover the flooding damage.
But if an earthquake directly damages your property, standard insurance is not enough. For example, suppose that an earthquake strikes your rental property and the foundation collapses. Without earthquake property insurance, you would not be covered.
The same is true if an earthquake rattles your business and causes the destruction of valuable merchandise. Without an earthquake insurance policy, you will be unable to recoup your losses.
Considerations for Purchasing CA Earthquake Insurance
Many property owners do not believe that they need earthquake-specific coverage. They may believe that earthquakes are rare. They might think that their current insurance is enough. It is important to consider several factors when you’re deciding whether your property would be well-served with commercial earthquake coverage.
The Needs of Your Property
As discussed above, standard insurance coverage does not include protections against earthquake damage. It is important to consider the needs of your property and calculate the potential costs in the event of an earthquake.
Many businesses are unable to recover following a natural disaster. This is especially true for uninsured or underinsured businesses.
Business Investments and Assets
Not every business or rental property faces the same risks. As a result, not all properties need the same types of insurance coverage.
Speaking with an experienced earthquake insurance agent can help you determine the policy that is right for you. The right earthquake insurance policy will protect your equity and income-generating property.
Pricing Earthquake Insurance Policies
Price is an important element in any business-related decision. The cost of California earthquake insurance will depend on several factors.
These include:
- The location of the property
- The age and condition of the property
- Potential replacement or rebuild costs
- Specific policy limits and coverage
- Deductibles
Price can be a concern for many property owners. But it is important to think of the potential costs of leaving your property unprotected, too.
Understanding the Coverage
When looking for the right earthquake insurance policy, consider the range of coverages. Different types of insurance policies will offer different levels of coverage.
Some earthquake policies also offer protection against the following types of natural disasters:
- Tsunamis
- Collapsing sinkholes
- Mine collapses
- Landslides
- Mudslides
Other policies are more limited. Some businesses, rental properties, and HOAs need coverage against these events. The location of a property will often determine its coverage needs.
Protecting Your Assets with Earthquake Insurance
Do not wait until disaster strikes. Earthquakes can happen at any time. They are practically an inevitability in California.
In 2019, California experienced an earthquake of 7.1 magnitude. That same year, there were more than ninety earthquakes of at least 4.0 magnitude. Disasters like this can cause enormous structural damage to commercial properties. Many property owners are unprepared.
Consider the insurance coverage needs of your property to protect your investments. Speaking with a reputable earthquake insurance agent can help you to find the policy that is right for you.
About Scott Litman Insurance Agency
At Scott Litman Insurance Agency, for over 29 years we have helped commercial landlords and homeowners find the most suitable earthquake coverage. If you’re interested in getting started, email us today at customerservice@sliains.com or fill out a contact form here.
