Saturday, 12 November 2011

Make Earthquake Insurance Affordable

Reducing the rate of earthquake insurance can be performed by knowing a few things about the building in which you reside or are thinking of residing. Earthquake insurance is usually expensive and sold separately from regular insurance policies. This is because earthquakes are the single most expensive natural disasters to recover from due to rebuilding costs of entire structures.

The premiums for earthquake insurance are based on the calculation for the most value of the property you own. There could be many factors that would be represented in the calculated price. Here is a list of factors that determine the premium amount for the property.

• Construction type
• Location
• Parking areas type
• Year building was constructed
• Insurable value
• Amount of stories within the structure

Construction Type

Depending upon the materials used to create the building, there are different factors associated with each. Whether the building is made from wood, brick, or concrete, the type of frame is important to know. One type may cost a lot less than another.

Location

Location of the building is important because the ground that it is built upon may cost more depending upon the firmness. If the location is close to a fault line where an earthquake is likely to happen, likewise this can drive up the cost for premiums.


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There may also be a factor of exposure that causes the insurance company to create higher priced earthquake insurance. If the insurance company does not have very many policies in the area, the capacity is low as well as the demand.

Parking

Parking types can also affect the rates for earthquake insurance. There are three main categories of parking for apartment or condos. The subterranean parking is located below the complex and has retaining walls of concrete built to hold the floors above. Soft story tuck under is basically carports which surround the sides of the building. The area located above these carports is supported by some two by fours. This type of parking is the most damaging to both people and vehicles. The last type of parking is the living space created over the garage. The difference is that this parking has the unit located above the two car garage.

Year

The year in which the building was built could reflect the codes that were enforced at that time. The building may have had several updates since then to bring it up to date with current codes. It is recommended to learn if the building is up to date or not should reduce the premiums amount to buy earthquake insurance.

Insured Value

In the event you over insured the building there is a large amount of coverage that will go unused for earthquake insurance. The deductible will also be a higher amount that is not needed to pay. There is also the case that you may underinsure the building and would have to pay out of pocket to recover from the loss when rebuilding. Based on the total amount for coverage, the premium would reflect this amount to pay.