Cost of Earthquake Insurance in Texas
The premium for earthquake insurance in Texas costs between 10 cents per $1,000 coverage and $5 per $1,000 coverage monthly. This means for a building valued at $500,000, the premium rate ranges from $50 to $250. Generally, the pricing is affected by the level of earthquake risk in the area. Other factors influencing earthquake premiums include the building type/age, coverage limit, deductible, coverage type, and insurer.
How Much Should I Pay for Earthquake Insurance in Texas?
Generally, the right amount of earthquake insurance should cover the cost of repairing, replacing, or rebuilding your insured building, properties, or additional expenses incurred when destructive quakes strike. So to determine how much you should pay for earthquake insurance in Texas, get the actual cost of the building or property you want to insure. Earthquake premiums vary from one person to another and will be determined by the insurance company offering the policy. The insurer fixes the right earthquake insurance cost based on the type of coverage, deductible, coverage limit, and the type of building (residential or commercial).
What Affects the Cost of Earthquake Insurance
The earthquake premium you will pay is based on three major factors: the building characteristics, coverage limit, and deductible.
ZIP Code: One of the most important elements in deciding the pricing of your insurance is the area of the insured building, which is determined by the ZIP code. If you reside in a region where earthquakes are common, your insurance premium will mirror this increased risk. Also, the closeness of active faults and seismic activities in your region will be used to calculate your earthquake premium. As such, you may have to pay higher if your building is located in Midland County than in other areas with low oil exploration.
Age: An older property is more expensive to insure since it may lack many new building regulations that assist avoid seismic devastation. Even if a structure has been refurbished to resemble a new building model, it may not still have basement anchor bolts or wall improvements installed.
Rebuilding Value: You have the option of insuring your property and its belongings for replacement cost or real cash worth. The cost of rebuilding your home or repairing damage using supplies of equal sort and quality is referred to as replacement value. The actual financial worth of your property takes into account its overall condition (wear and tear). Actual cash value coverage compensates you for your loss, but it seldom covers the whole cost of repairing or replacing the item.
Building Type and Materials: Earthquake premiums for insuring tall structures, especially commercial properties made of glass, may be expensive since they have a higher risk of collapsing in a tremor shock. Another aspect of the building is the type of foundation used when building. Loose, sandy soil is more susceptible to surface ruptures than clay or rock. In addition to this, elevated foundations are more flexible to movements on the earth's surface, which is crucial during an earthquake. You should expect a higher earthquake insurance premium if your property has some of these weak characteristics.
Coverage Limits and Deductibles: Typically, less coverage limits have cheaper premiums. This simply means that the cost of insuring a $500,000 property is more than the cost of insuring a property worth $250,000. The amount of your deductible will affect the cost of your coverage, so it is critical to consider all of these elements when comparing policies.
Can you Lower the Cost of Earthquake Insurance in Texas
Yes, you can lower the cost of your Texas earthquake premium since there is no fixed price for all homeowners, tenants, and renters. An insurer uses different factors to determine your annual premium. Here are some steps to take if you wish to lower your premium pricing.
Compare Prices: Generally, different insurance companies offer varying premiums for the same earthquake coverage plan. This is because each insurer offers unique services to their customers. As such, it is best to contact your Texas-licensed insurance agent to discuss your needs. A licensed insurance agent can obtain insurance quotes from multiple earthquake insurance companies to help you compare prices. However, it is not advisable to base your decision just on pricing. The earthquake insurance you choose should provide the kind of support you would anticipate if you need help making a claim.
Consider Earthquake Retrofitting: The condition of your building is an integral part of your earthquake insurance plan. Earthquake retrofitting aims to prevent your house from shifting off its base, making it firmer and less vulnerable to catastrophic structural damages during a ground rupture disaster. Quake retrofit may involve installing storm shutters, bracing your roof, or purchasing stronger roofing materials. Older houses can be modified to make them more earthquake resistant. With the help of a professional insurance agent in Texas, you will discover how to complete a seismic retrofit to help reduce the earthquake premium price.
Use the Same Insurer: Most homeowner insurance companies in Texas offer earthquake policies as an endorsement of your initial policy. Homeowners and tenants can choose this policy add-on rather than purchase a separate earthquake policy. Purchasing an earthquake endorsement may not be suitable for business owners with commercial properties. However, purchasing different coverage plans from the same insurer may qualify you for a discount.
Increase Deductibles: Earthquake policy deductibles are similar to homeowners insurance; the higher the deductible, the lesser your earthquake premium since you will be liable for a bigger part of the coverage. Increasing your deductible means you will have to bear most or all of the cost of repairing or rebuilding your home out of pocket in the event of an earthquake.
Lowering your earthquake insurance cost may sometimes negatively affect your coverage plan, particularly if you are reducing coverage limits and increasing your deductible. It is best to consult with a licensed insurance agent to see the best ways of reducing the earthquake insurance premium.
How to Save on Earthquake Insurance in Texas?
Getting an earthquake premium discount will help you save on earthquake insurance in Texas. The best way to do this is by upgrading your house to reduce surface rupture risks. Generally, soft-storied buildings made of wooden frames and non-ductile concrete get damaged easily by minor tremors. Small-scale quakes also affect old houses (constructed before 1980) with crawl spaces or structures built on hillsides. Retrofitting these high-risk structures to meet FEMA’s Seismic Building Codes will make your house resistant to high-magnitude tremors. This way, you can request a review of your earthquake insurance premium from your insurer.
You can also save on earthquake insurance by choosing your deductibles carefully. It is best to discuss this with your insurance agent to avoid selecting a coverage plan that is not suitable. Generally, high deductibles mean lower earthquake premiums, but it also means a higher out-of-pocket payment to cover the financial losses caused by ground ruptures. With the help of a licensed insurance agent, choosing the right deductible will help you save on Texas earthquake insurance. An insurance agent can also help you get earthquake insurance quotes from different providers. This way, it will be easier to compare quotes and choose the best rates, which will help you save on earthquake insurance.
What is the Average Cost of Earthquake Insurance in Texas?
The average cost of earthquake premium in Texas is $700 per year for a $100,000 coverage amount. Insuring commercial buildings against earthquakes costs more while buying a standalone earthquake coverage costs less. Several factors will determine an individual’s premium price. In some cases, the premium for rental and commercial structures may be the same as the one for residential buildings. Licensed insurance agents in Texas often help individuals calculate the average cost of earthquake insurance for their properties.
How Much Earthquake Insurance Coverage Do I Need?
The amount of earthquake insurance you need depends on the value of your building and belongings. For instance, you will need to pay a higher premium to secure a $500,000 building than a $100,000 building. You also need enough coverage to pay for the personal properties in the building and other expenses incurred as a result of quake damage. The location of your building is also important when determining the earthquake coverage plan you need. In Texas, Midland County and the Texas Panhandle are known for oil exploration and hydraulic fracking, often leading to high seismic activities. If you live in any of these regions, you will need enough earthquake insurance coverage to protect your building when ground tremors occur.
How Much is Earthquake Insurance Premium?
Earthquake insurance premium for a residential or commercial building varies based on the type of coverage, location of the building, and value of the building. You should expect to pay between $500 and $800 per year for a residential property in Texas. The earthquake premium for commercial properties may cost as high as $3,000 per year for coverage worth over $1 million. Consult an insurance agent in Texas to get a personalized quote on how much premium you will pay to protect your house from earthquake damage.
