How the earthquake deductible buyback policy works

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The California Earthquake Authority estimates that only 10% of homes in the state have earthquake insurance protection.

While the costs of the primary insurance policy may not be too pricey ($798 statewide average), the high policy deductibles may cause homeowners to pause.

Earthquake policy deductibles vary from 5% to 25%, which could have a sizable financial impact on your wallet.

That’s why a separate policy, called an Earthquake Deductible Buyback, can be purchased to reduce the large deductible on earthquake insurance.

This additional policy works to reduce the out-of-pocket expense, in the event of an earthquake.

Here’s how the Earthquake Deductible Buyback works. If your primary earthquake policy has a dwelling replacement cost limit of $1 million and carries a 15% deductible, your deductible would be $150,000. That’s money you have to pay before the insurance kicks in.

By purchasing a buy back policy of 10%, you could reduce your deductible to 5% or $50,000 out-of-pocket.

Earthquake buyback policies can reduce primary deductibles by 2.5%, 5%, 7.5% or 10%.

If you are interested in learning more about earthquake buy back, please contact a Chivaroli Premier Private Client Advisor.