California is one of the golden states in the country when it comes to financial opportunity. If you’re in business in the media, technology, or entertainment industries, California is a great choice. As a result of all that financial activity, other industries and business sectors also do well. Housing and rental properties are clearly one of the benefactors of this affluence.
But renting out properties in California, while lucrative, does have its risks. The one threat every property in the state faces is the danger of damage through an earthquake, which is why California earthquake insurance is an essential form of financial protection.
You Don’t Need It, But You’ll Want It
When you own a home in California or decide to rent your property, you will, of course, be required to get insurance. However, earthquake insurance coverage is strictly optional. An offer will be made to provide that protection, but you’re under no obligation to actually accept it.
While it seems like you might be saving money this way by not taking on another monthly payment, you put your property—and profits—at great risk. California is a state that sits right on the border of two continental plates, and it is the interaction of these plates, at a location known as the San Andreas Fault, that makes California a frequent victim of earthquakes. When it comes to earthquakes, it is, unfortunately, always a matter of “when” not “if.”
Coverage Can Help
It’s important to keep in mind that in some instances earthquake insurance may not necessarily cover all of the financial cost of an earthquake, such as replacing actual contents inside a building. However, for landlords, earthquake insurance coverage provides a lot of security should your building be damaged. You will take losses on rent as tenants are forced to find new accommodations, for example, or your building may be outright destroyed and you will need to construct something new on the land.
In these cases, earthquake insurance can provide a safety net that protects from an unrecoverable loss. You may lose time and some additional expense in recovery, but with earthquake insurance coverage, you and your property can get back on your feet.
Evaluate Your Property
California earthquake insurance rates are based on many different aspects, so your payments may vary significantly based on a number of key elements. The location of the property and its proximity to the San Andreas and other Faults is the biggest determining factor.
However, other considerations, such as the age of the building, the type of foundation it uses, and even the soil type in the area all play contributing roles when evaluating a property for earthquake insurance purposes. There is no “universal policy” for all buildings in all locations. Exactly what kind of premiums you’ll face depends on many elements unique to your property.
Get the Protection You Need
Earthquake insurance coverage is great protection, but it’s not the only option. If you want better premiums, and a higher chance lowering your losses and damage, consider getting actual structural earthquake protection on your building.
Existing structures can be retrofitted with a variety of different improvements to your property, such as reinforcement, or foundation work that makes your building more resistant to earthquake damage, and lowers your premiums. If you’d like to know more about earthquake insurance and what you can do to protect your investment, contact us today 800.644.6443.
