A Social Security cost-of-living adjustment could have a small but positive impact on retirement planning.
All Eyes on Northridge and Earthquake Preparedness
NEW YORK, Jan. 16, 2014 /PRNewswire-USNewswire/ -- January 17marks the 20th anniversary of the Northridge, California, earthquake. The magnitude 6.7 quake, which caused an estimated $15.3 billion in insured damage (more than $24 billion in 2013 dollars), is a vivid reminder that people in many parts of the country face this threat and should consider purchasing earthquake coverage, according to the Insurance Information Institute (I.I.I.).
"Standard homeowners, renters or business insurance policies do not cover damage from an earthquake," said Jeanne M. Salvatore, the I.I.I.'s chief communications officer and author of its consumer blog, The Fine Print. "Coverage is usually available for earthquake damage in the form of an endorsement or as a separate policy from private insurance companies."
In California, homeowners can also get coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization. The CEA gives homeowners discounts on their policies when they retrofit their older homes to better fit current earthquake standards for instance, bolting the house to the foundation; bracing cripple walls with plywood; and strapping water heaters to the structure of the home. The CEA does not offer coverage for commercial, industrial or business properties.
Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions. It may cover increased costs to meet current building codes and costs to stabilize the land under your home. Earthquake insurance covers debris removal and pays for extra living expenses you may have while your home is being rebuilt or repaired.
Earthquake insurance policies often carry a percentage deductible a rather than a dollar amount. Deductibles can range anywhere from 2 percent to 20 percent of the replacement value of the structure, depending on factors such as where you live and the type of home you have. For example, if it costs $100,000 to rebuild a home and the existing policy has a 2 percent deductible, the policyholder would be responsible for paying the first $2,000 in repair costs.
Coverage for other kinds of damage that may result from earthquakes, such as fire and water damage due to burst gas and water pipes, is generally covered by standard homeowners and business insurance policies.
Cars and other vehicles are covered for earthquake damage under the optional comprehensive portion of an auto insurance policy.
"If you have any questions about coverage for earthquakes or other disasters, contact your insurance professional," noted Salvatore. "You want to understand what you are and are not covered for as well as how much coverage you have before you have a loss. That way, you can update your insurance policy and take steps to make your home or business more disaster-resistant."
For more information about the 20th anniversary of Northridge, check out the special section on the I.I.I. website.
The I.I.I.'s free mobile apps can help you create a disaster plan, learn about selecting the right insurance for your needs and budget, and create and maintain a home inventory. Learn more about our suite of apps here.
The I.I.I. has a full library of educational videos on its You Tube Channel. Information about I.I.I. mobile apps can be found here.
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org
SOURCE Insurance Information Institute