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.