Most California residents have experienced an earthquake at some point, particularly if they have lived in the state for their entire lives. Of the significant earthquakes that occurred in the United States in 2019, most of them occurred in California, according to the Earthquake Hazards Program of the U.S. Geological Survey (USGS). A major earthquake can cause massive property damage. Although earthquake insurance is available, the California Department of Insurance reported that only 15 percent of California residents purchased earthquake coverage in 2018. For residents who live in earthquake-prone areas such as California, it is important to understand coverage that is available. An experienced property damage lawyer can walk clients through every step of the claims process and secure the financial compensation they deserve.
What Causes an Earthquake?
An earthquake occurs when the Earth’s tectonic plates shift. The energy that is stored in the Earth’s crust is released, producing seismic waves that cause the ground to shake. There are two tectonic plates in California; the Pacific Plate consists of most of the Pacific Ocean floor and the California coastline, and the North Atlantic Plate covers most of the North American continent and parts of the Atlantic Ocean floor. The San Andreas Fault is the primary boundary between these two plates. The two plates are constantly moving, and the San Andreas Fault system adapts to the movements. However, when there is too much stress on the edges of the plates, a major earthquake can occur.
Earthquakes can cause significant property damage, particularly to homes that are built on old waterways, unconsolidated landfills, or unstable soil. Buildings that are not anchored to the ground by a reinforced foundation, such as trailer homes and manufactured homes, are at risk of major damage during an earthquake. Although earthquakes cannot be prevented or stopped, there are steps that property owners can do to protect their homes.
What can Residents Do to Prepare for an Earthquake?
If someone lives in an area where earthquakes are likely to occur, it is important to be prepared by keeping the following tips in mind:
- Residents should find a safe place away from windows, bookcases, or tall furniture that could fall on them. It is important to make sure that the safe spot is close by, since statistics show that the more people move around during an earthquake, the more likely it is that they will be injured.
- Wherever a person’s safe space is located, they should practice dropping to a low space, covering their eyes, keeping their head down, and holding on to a sturdy desk or table. Earthquake drills should be conducted twice a year.
- It is best to stay in the safe space until the earthquake stops, then check to see if anyone has been hurt.
- Residents should be aware that broken gas lines, damaged electrical lines, and sparks can cause fires.
- An elevator should never be used during an earthquake. The safest thing for people to do is to remain inside, but if they must leave a building, they should always use the stairs.
- Those outside should move away from buildings, power lines, trees, and anything else that could fall on them. Crouching down and protecting the head will help prevent injuries.
Is Earthquake Insurance Needed?
Regular homeowner’s insurance does not cover property damage caused by earthquakes. Residents must purchase an earthquake insurance policy separate from their insurance company. When a homeowner is deciding whether to purchase earthquake insurance, there are several important factors that need to be considered. For example, homeowners should consider the cost of the insurance premium and deductible. The deductible is a percentage of the home’s value, and homeowners can choose to pay an amount ranging from five to 25 percent.
The cost of the home and its proximity to a fault line should also be considered. In California, earthquake insurance premiums can cost approximately $800 per year. Premiums may be even higher for residents in high-risk areas. Discounts are available for homes that are braced and bolted to the foundation. When considering the cost of earthquake insurance, a homeowner must think about the potential damage that a major earthquake could cause, as well as costs for repairing the damage. However, even with earthquake insurance, there are limits to what is covered.
What is Covered by Earthquake Insurance?
In the state of California, basic earthquake insurance covers damage to a person’s home, as well as any personal belongings that may have been damaged or destroyed by the earthquake. When determining that amount of coverage needed, homeowners should consider purchasing replacement cost coverage instead of an actual cash value (ACV) policy. Replacement cost coverage will reimburse the owner on the cost to rebuild their home and replace the lost contents. Basic earthquake policies cover the following:
- Dwelling coverage: This covers the home up to a certain limit.
- Personal property coverage: This covers items such as televisions, computers, and furniture. This will also cover china and crystal if the homeowner purchased optional breakables coverage.
- Additional living expenses (ALE) or loss of use: This covers the costs associated with living in a rental home, apartment, or hotel while the home is being repaired or rebuilt.
What is Not Covered by Earthquake Insurance?
It is important that homeowners thoroughly review their earthquake insurance policy, as there are things that are not covered. The following are common earthquake insurance exclusions:
- Fire: This is covered under the homeowner’s policy. Even if the fire is caused by an earthquake, it is not covered by earthquake insurance.
- Land: Any erosion, sinkholes, or other damage to the land caused by an earthquake is not usually covered by earthquake insurance. Homeowners may have the option to purchase additional coverage to restore or stabilize land.
- Vehicles: Damage to vehicles is not covered by earthquake insurance. Some auto insurance policies may cover the damage, so vehicle owners should be sure to check their policy.
- Flood: Damage caused by flooding from an earthquake or tsunami is not covered by earthquake insurance. Homeowners will need to purchase flood insurance to protect their home from water damage, even if the flood is caused by an earthquake.
How is a Claim for Property Damage Filed?
If someone has suffered major property damage following an earthquake and they purchased an earthquake insurance policy, they will need to take the following steps to seek financial compensation:
- The insurance agent should be contacted as soon as possible. The homeowner should let the agent know that their property sustained major damage and that they would like to file a claim.
- If the insurance adjuster informs the homeowner that the property damage does not exceed the deductible, a second opinion by an independent contractor or a licensed structural engineer should be sought.
- Homeowners should review their policy, reading through every page of the policy so that they understand what is and is not covered. If homeowners have quotations or concerns, they should consult with a professional who specializes in advising insurance consumers.
- Before submitting a final proof of loss form, homeowners should make sure they understand their rights, coverage, and extent of their claim.
- A claimant needs to be organized, informed, and assertive. All documents related to the claim should be kept in a binder. Claimants should keep a detailed record of every person with whom they speak, including names and job titles. Photos of the property damage should be taken and kept in a safe and secure spot. If the insurance adjuster is not handling the claim properly, the claimant should contact a qualified property damage lawyer as soon as possible.
- Claimants should make sure that they are compensated for ALE. They need to check their policy to confirm that they have ALE coverage. Claimants should keep receipts for all meals, hotels, and other expenses from having to vacate the house.
- When rebuilding property, homeowners must keep in mind that they are entitled to compensation for what is known as like kind and quality. Claimants should not accept estimates that include short-cut repair methods or that use lower quality materials.
- Homeowners should not accept the insurance company’s contractor or estimates. They should insist that their claim be settled based on their own contractor’s estimate amount.
- Claimants must never sign a release or waiver until they have read all the documents and gotten advice from a skilled legal professional.
LA Property Damage Lawyers at ACTS Law Assist Clients with Earthquake Insurance Claims
If you suffered significant property damage after an earthquake, contact the LA property damage lawyers at ACTS Law at your earliest convenience. We understand how devastating earthquakes can be, and how crucial it is that you receive the funds necessary to repair and rebuild your home. We will walk you through every step of the claims process and secure the maximum financial compensation you deserve. To schedule a free consultation, call us today at 833-ACTS-LAWopens phone dialer or contact us online.
From our offices in San Diego and Los Angeles, we serve clients throughout Orange County and Los Angeles County, including Beverly Hills, Calabasas, Malibu, Santa Monica, Long Beach, Hidden Hills, Pasadena, San Marino, Brentwood, Encino, Newport Beach, and Foresthill.