A few facts about earthquake insurance:
Fact I: Most residential insurance policies do not cover earthquake damage – a separate earthquake policy is required. Without earthquake insurance to help you cover the costs of repairs and other expenses that come with catastrophic damage, you will pay out-of-pocket to fix your home, to replace your personal property, and to live and eat elsewhere.
Fact II: Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if the entire home is destroyed, but not useful if the home is merely damaged. Rates depend on location and the probability of an earthquake. Rates may be cheaper for homes made of wood, which withstand earthquakes better than homes made of brick.
Fact III: The earthquake deductible buyback program enables a property owner to reduce the deductible on a residential earthquake policy. The deductible can be lowered by up to 10% resulting in a final deductible as low as 5%. The program is currently available for residences in California. Minimum Premium – $500 (Los Angeles county), $250 (all other counties)
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Program Highlights
The earthquake deductible buyback program enables a property owner to lower the deductible on a residential earthquake policy.
The deductible can be lowered by up to 12.5% resulting in a final deductible as low as 2.5%.
Deductibles can be lowered by up to $1,500,000 in total reduction.
The program is available for residences in California.
Eligibility Requirements
To be eligible for the earthquake deductible buyback program:
- The residence must be a single family residence, duplex, triplex, or fourplex located in California.
- In force overlying earthquake policy is required.
- The overlying earthquake deductible must be 12.5% or greater.
Additional Program Capabilities
The earthquake deductible buyback program is designed to be a useful and efficient resource to offer across your client base. All California residences are eligible. In addition, there are:
- No age restrictions.
- Flexible coverage terms. The buyback policy can be written for a term up to 12 months so the buyback expiration date coincides with the overlying policy expiration date. The premium for any term other than 12 months will be calculated on a pro-rata basis, subject to minimum premium.
The program is structured to cover a single location per policy. Clients with multiple locations may obtain multiple policies.
Available Buyback Options
The available buyback options are determined based on the overlying earthquake deductible.
How the Deductible Buyback Works
The Buyback policy fits between the existing policy and the deductible.
| Existing Policy | The overlying (existing policy) pays when the damage exceeds the sum of Your Deductible and Buyback Policy. |
|---|---|
| Buyback Policy | The buyback policy pays when the damage exceeds Your Retained Deductible |
| Your Retained Deductible | The amount you retain before your buyback policy pays. |