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Earthquake Facts and Myths Corrected

from Robert Bell Insurance Brokers

by Michael Bell on Oct 7, 2014

There is a lot of myths and rumors regarding earthquake insurance. Most every business has fire insurance these days, but many companies don’t consider earthquake insurance. Earthquake insurance is slightly different than traditional property insurance that every company should be aware of. We’ve broken out the facts to help dispel the myths.

Earthquake Myths and Facts

  • MYTH – Earthquake insurance is automatically included as part of your business insurance package. Not true. You need separate coverage in most cases.
  • MYTH – An earthquake insurance policy does not cover the loss of landscaping, pools, fences, and separate structures (including garages).
  • MYTH – Most buildings today are earthquake resistant. Not true, some newer buildings may be up to current building codes.
  • MYTH – If a major earthquake hits, the government will step in and cover us.
  • MYTH – California will fall into the Pacific Ocean if a big earthquake hits. Not true. California won't sink. However, earthquakes can cause landslides, slightly changing the shape of the coastline.
  • FACT – Building codes have helped keep building safer. This is true for newer buildings. There are a number of buildings in California subject to seismic activity which were built under older codes.
  • FACT – You don’t have to live on a fault to have damage. Damage to buildings can occur hundreds of miles from an earthquake fault.
  • FACT - Loss of use insurance is usually part of the earthquake policy, but may have a set dollar limit.

Earthquake insurance covers direct physical loss to property (buildings & equipment). Earthquake is normally defined in your policy as “shaking or trembling of the earth, caused by volcanic activity, tectonic processes, or any other cause.” Most policies state that any shocks that occur within a 72-hour period constitute a single earthquake. 

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