Why the wealthy should consider earthquake insurance.
Why Senior Homeowners Should Consider Earthquake Insurance
Why earthquake insurance becomes more beneficial as you pay your equity
Have you been faithfully paying off the mortgage on your primary home for the past 15 years? Just starting to feel like you’re progressing?
be cerfull, You may be at increased risk From losing your hard-earned basic balance in your home if you live in an earthquake country. Although making your home payments is generally a good thing, there are new issues that you should be aware of. How exactly?
When you carefully pay off your mortgage loan and get richer, you slowly accumulate a “nest egg” inside your nest (in your home.) However, many people expect to benefit from this equity when they reach retirement either by selling the house or refinancing, or perhaps Through a reverse mortgage.
But when you’re pooling money in your home, you need to make sure it’s properly protected. Your home (homeowners) insurance should be very solid, with a highly rated and reputable insurance company. It should have the widest possible coverage. but Even the most extensive form of home insurance rules out two major risks. These two dangers can be covered in separate forms: Floods and earthquakes. Flood insurance should definitely be considered, and in high-risk flood areas, it is often required by the lender. But earthquake insurance is not required by banks. So I find that it is rarely considered.
It’s time to look at it again:
15 years ago, earthquake insurance was rarely sold and was very expensive. Times have changed. Earthquake insurance for most structures can be purchased through the California Seismic Authority (CEA) and through several independent earthquake insurance companies such as ICAT, Geovera, Palomar, and Arrowhead. There is more. These companies are now openly competing for your business. The scene is slowly changing. Higher deductibles, separate deductibles, and extended coverage for things like swimming pools made them more affordable and personalized.
What is the value of a Nest Egg to you?
If you really expect to retire based on the equity in your home, you need to be defensive. The best home defense is good insurance. California has experienced many devastating earthquakes in the past and there are likely to be many more to come. Although homes are built to stricter rules and guarantees, no home, no matter what you might think, is impervious to all earthquakes. Destroying your home can take years to rebuild and involve costs that far exceed your wildest expectations based on the concept of increased demand. What is increased demand? Increased demand is the basis for rising costs as resources become increasingly limited due to the scale and scale of the event. Do you think it is difficult to hire a contractor now? Wait until half of the city is torn apart by a big earthquake.
Destruction is not complete.
Many people mistakenly believe that just because your home has not been destroyed by an earthquake, everything will be fine. Unfortunately, from previous earthquake experiences, even if the earthquake did not destroy your home, it could cause the foundation to be slightly damaged and trigger what is known as a Red Tag condition. If your home is red flagged by a local government official, your home will have to be repaired before you are legally allowed to reside there. Do you and your spouse have enough money to rebuild your business? And live in a hotel for two years?
How to protect yourself:
Many homeowners believe that your best defense against an earthquake is to use your money to retrofit your home with the latest technology. Fix your home on foundation, plywood, and the like. Others think their money is better spent with earthquake insurance. However, both strategies involve doing something to protect your investment from a known disaster. Simply ignoring it will not allow the future problem to go away. Big earthquake in California is coming. Personally and professionally I think the best defense is to do both: “reconfigure your home to modern standards and buy an earthquake policy at the maximum discount you can afford.
A little preparation on your part can prevent a poor retirement. Consider all of your options to help protect the nest egg.
Notes: Speak with a licensed contractor in your state when considering earthquake renovations in your home. Likewise when considering adding, changing or canceling any insurance policy – always speak with a licensed agent in your state or jurisdiction. Insurance rules and regulations and forms of coverage can vary from state to state.
Johnson is an independent insurance broker based in Marin County, California. It is authorized to request insurance and service only in the State of California. CA License 0H11625.