Paying for Earthquake Insurance in Texas

Private companies offering earthquake insurance in Texas accept autopay transfers or manual payments. You can set up automated payments via credit cards, debit cards, Electronic Funds Transfer (EFT), or online bill pay. Automatic payments transfer your earthquake premium when it is due to avoid canceled policy due to missing payments. Note that using credit and debit cards often attracts service fees. An alternative to automatic payments is paying by check, cash, or money order. Manual payments are often made in person, which may be time-consuming since you must visit the insurance company.

Who Pays for Earthquake Insurance?

Policyholders pay for earthquake insurance in Texas. An earthquake policyholder may be a homeowner, renter, or tenant insuring a residential/commercial property against ground tremors.

What are the Payment Options for Earthquake Insurance?

Acceptable payment options for purchasing an earthquake policy in Texas include:

• Cash

• Checks (cashier check, business check, and personal check)

• Money orders

• Electronic bank transfers

• Mobile-payments

• ACH payments

• Credit/Debit Cards ( Discover, Visa, Mastercard, American Express, or Diners Club)

Can I Finance the Earthquake Insurance Cost?

Yes. Insured, mostly commercial property owners, can apply for premium financing to fund their earthquake policy. Premium financing works like a typical loan: a premium financing company pays off an individual's earthquake premium in the form of a loan. It then provides an easy method for the insured to repay the loan with interest. In Texas, licensed premium financing companies may be insurance agents, private companies, or banks. Not all policyholders can fund their earthquake insurance policies using premium financing. Generally, premium financing companies in Texas often consider only business owners or individuals with high net worth or loan collateral for premium financing. This is why it is important to speak with a knowledgeable state-licensed insurance agent in Texas before going ahead with premium financing. A professional can also discuss other methods of financing earthquake premiums.

How Often is Earthquake Insurance Paid?

Generally, earthquake insurance is paid annually. However, some insurers allow policyholders to pay their insurance premiums in monthly or quarterly installments. Monthly premiums are usually paid:

• on the first of each month,

• on the anniversary of the policy, or

• according to your billing schedule.

How Do I Send my Earthquake Insurance Bill?

You should discuss your earthquake insurance bills with your insurer. If you have questions about the policy terms or to find the address where to send the payment, contact a knowledgeable property insurance agent, who can go over your coverages and clarify any ambiguities..

Do I Pay Taxes on Earthquake Insurance?

No, earthquake insurance in Texas does not impose additional taxes on the insured.

Similarly, claims payout received from your insurance company to repair or replace a building or personal property after an earthquake loss is not considered income, and therefore is received by the insured tax-free. The Internal Revenue Service (IRS) only taxes income.

Can you Pay Earthquake Insurance Late?

You should refrain from late earthquake premium payments. Insurance companies frown at late payments and may cancel your policy. Some insurers will notify you a week before the premium payment is due to avoid late payment. You can set up automatic transfers to help you pay on the due date. Otherwise, you should contact your insurer to explain why you may not pay on the due date and keep your earthquake coverage in good standing.

Does Earthquake Insurance Have a Grace Period?

Yes. Most earthquake insurance companies operating in Texas offer a grace period between 24 hours and 30 days. Look up the policy declaration page or speak with your licensed insurance agent to find out if your insurer offers a grace period and the length of your particular period.

What is a Grace Period in Earthquake Insurance (if applicable)

An insurance grace period is a specified length of time given to policyholders who cannot pay their earthquake premium on the due date. During the grace period, an insurer will not terminate the policy. The length of the insurance grace period varies by insurer and earthquake coverage type.

Is There a Grace Period for Earthquake Insurance after Termination?

No. Once you terminate your contract with an insurance company, or if the policy is terminated by the insurer, there is no grace period. You can only purchase a new earthquake policy after termination.

What to Do if you Can’t Pay for Earthquake Insurance?

If you don't have earthquake coverage, or cannot afford it, concentrate on improving the condition of your building regularly. Upgrading your residential or commercial property by retrofitting will make the structure resistant to surface ruptures and reduce the effect of earthquakes. To protect your building and personal belongings from tremors:

• Use museum putty to secure breakable belongings.

• Use latches on china cabinets.

• Bolt high furniture like cabinets and bookshelves to the studs in the walls.

• Use computer straps and other fastening accessories to protect computers and televisions.

If a high-scale tremor occurs when you don't have earthquake coverage in Texas, you can apply for SBA’s Disaster Assistance. You can apply for this government loan if the tremor is a Presidentially declared disaster. To obtain the disaster assistance loan from the Small Business Administration, you must submit your contact information, social security number, FEMA registration number (if there is one), lease or dead information, and financial information. SBA’s Disaster Assistance offers up to $840,000 to repair or replace the destroyed building and personal belongings. The limit for replacing or repairing your home is $200,000, while you can only get up to $40,000 for personal properties lost to earthquake damages. Speak with your knowledgeable Texas insurance agent to find other alternatives to protect your home from earthquakes.

Will my Earthquake Insurance Lapse if I Miss a Payment?

Your earthquake policy may lapse if you miss a payment. Earthquake coverage lapse occurs when an insurance company terminates a policy due to late or non-payment. Most insurers operating in Texas offer a grace period of 30 days, which gives you more time to pay your earthquake premium after the due date. After the 30-day grace period, an insurer may cancel the policy if you don't pay. Having a lapse in payment on your insurance record can flag you as a higher risk customer and as a result - possibly make your insurance premium costs go up in the future. Hence, it is advisable to always review the earthquake policy with your licensed insurance agent to avoid insurance lapses.