The Beginnings

State Farm insurance began in 1922, the invention of a man named George J. Mecherle. Mecherle thought that he could come up with a better insurance company than the rest, offering better coverage and great rates. So he did. Something about Mecherle’s vision was right – more than eighty years later, State Farm Insurance is still going strong.

“In just over 80 years, State Farm Insurance Companies

Mobile Homes should be insured like any other type of home. Normally this means hazard insurance. But it also could be for flood or earthquake.

Hazard insurance covers damage from: Fire, wind, theft, vandalism, collision, freezing and pipe burst (leaks from pipes, washing machines, water heater, etc.)

Collision would be from a car or other automobile, or an aircraft. Hazard insurance includes the following categories:

A – Dwelling – this covers the actual structure. Typical cost per year for a normal mobile home will run from a couple hundred dollars to several hundred dollars.

B – Other Structures – this would be any other buildings like a shed.

C – Contents – this would be up to a certain amount for all of the belongings and appliances in the home. Make sure you video tape all of your contents and put the record of this in a safe deposit box.

D – Loss of Use – this would be for any expenses when you cannot use your home for any reason. An example is recently there were some fires in Santa Barbara California. Some residents did not have any damage to their homes, yet they were forced to evacuate. Well, their costs of evacuation would be covered. Not many people know this!

Flood insurance is either Preferred or Normal.

Preferred is when the home is not in a flood zone according to the FEMA flood maps. These maps are constantly changing and it is possible for a home to not be in a flood zone one year, and in a flood zone the next. Now, this is not typical but it can happen.

Normal flood insurance is when the home is in a FEMA flood zone.

Flood insurance is some of the most expensive, costing upwards of $1,000/year for a typical mobile home. To decrease this cost the home owner could get an elevation certification by a surveyor and if the home is high enough, the insurance cost would be dramatically reduced.

Flood insurance would cover dirt and debris from a flood, water damage from an actual flood or from a burst pipe, or any other type of water disaster.

Last, there is Earthquake coverage. This covers the structure from damage from an earthquake. Typically the most damage a mobile home will have from an earthquake is from coming off the foundation piers. This usually is not that damaging and can be righted quite easily by a mobile home contractor with the right tools. But, the plumbing (including gas) and electrical connections would need to be repaired. Check out our other elerts for more about putting a new unit on your space.

Haiti was greatly devastated from the earthquake the hit the country last January 12, 2010. With a magnitude of 7.0, many lives were lost, buildings and structures have collapsed. Millions of dollars of property were destroyed in just an instant. This event just showed us how destructive the force of nature can be and this tragedy can happen at any country in the world. Survivors of earthquake face great financial setbacks as they try to rebuild there homes.

Fear is the greatest motivation. After what have happened in Haiti many homeowners now are looking for free insurance quotes, California being prone to earthquake, made many of its residents re-think and re-evaluate their policies.

Earthquake can strike at any place at anytime, like what the earthquake in Haiti showed. Unstable buildings and poorly constructed structures could collapse easily. Insurers offer various types of insurance packages pertaining to damage coverage, these packages are named HO-1 up to HO-8, most owners settled for an HO-3 package which covers damage to structure, contents, property, possession and liability coverage. However, this type of policy does not include coverage for natural disaster. Earthquake and other natural disaster coverage policy are to be bought separately.

In the event that you are unable to live in your shelter because of the extreme damages of your house has received from a natural disaster. Your insurer will shoulder all living expenses and your family maybe temporarily be covered until a permanent housing can be assumed. Natural disasters and calamities may render you homeless.
Losing one’s property is a horrifying and traumatic experience, even if your home insured, it is still better to have your house still standing after an earthquake than going to claim your coverage with your house destroyed. Reinforcing you’re the foundation of your house could not only increase the safety of your house but some insurers also offer discounts on reinforced houses. Some building and houses collapsed days after an earthquake, this is because the damage inflicted in these establishments has weakened the foundation of their structure. Carefully check the condition of your house, it best to check the foundation of your home to determine which area might collapse during an earthquake.

However this will not guarantee that it will not collapse, since Earthquake damages depend on the intensity of the quake. If your house is insured, make preparations that will let claiming process easier and faster in case you may need to file a claim. Document and make an inventory of your properties, this can be done by simply taking pictures or video taping your properties. This will be proof of what you own before the time you may need to claim your insurance.

Natural disasters like earthquake can be very destructive, as it has shown in the aftermath of the recent Haiti earthquake incident. If you just bought a property and moved into California, you should immediately look for free insurance quotes, California is prone to earthquake and having insurance could really help you in the event you are victimized by an earthshaking calamity.

Earthquake home insurance, obviously, isn’t something that everyone needs. For those who do need it, however, it sometimes means the difference between a devastating, but manageable, crisis and a total financial loss. If your house or apartment is ruined in an earthquake, you can count on a lot of difficulties. Like fires, earthquakes can raze a structure to the ground. Unlike fires, there is little you can do to prepare for earthquakes. No matter how hard of a shake our best buildings can take, nature can always provide a shaking that’s just a little more severe.

Earthquake home insurance will even be required by mortgage underwriters in some areas. California mortgage lenders, obviously, may require that homeowners purchase such insurance. In some areas, an earthquake is among the likeliest disasters. While you’re always at risk of losing your home in such an event, you can ensure that you don’t lose your shirt, as well. A good insurance policy can cover a great many expenses, from reconstruction to the purchase of a new home to your expenses while you’re displaced. It can also cover the items within your home, which may almost equal the home itself in value.

Earthquake insurance is only the beginning of what a homeowner needs to have to mitigate their risk, however. Consider what happens after an earthquake. Oftentimes, the aftermath is more devastating than the earthquake itself. There are often fires, buildings that collapse long after the event, destroyed roads, ruined water and sewer systems and a host of other issues. In short, any significant earthquake is guaranteed to be a huge mess, both for the people who live in the affected area and for those who arrive to help clean that area up. This means that you’ll need other types of insurance if you’re to be truly covered.

Earthquake insurance will only cover the damage from the seismic event, according to the specifics of the policy. Expect those specifics to be agonizingly precise, as well. Insurance companies, however, are very experienced with these events and can tell you what additional types of coverage you’ll need to be protected in such an event. This may include fire damage insurance, damage from exposure to the elements and other possible threats. Insurance companies have to be very specific in their coverages, but they offer enough different types that you can get everything you need quite easily.

Earthquake Hazards in the United States

Although the West Coast and Alaska generally has the greatest earthquake activity, the potential for earthquakes exist almost everywhere in the United States. Active areas in the Midwest include: 1) The New Madrid Seismic Zone in southeastern Missouri which has the potential to impact eight states: Alabama, Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri, and Tennessee; and 2) The Wabash Valley Seismic Zone along Illinois-Indiana border that would impact three states: Illinois, Indiana, and Kentucky. In Eastern United States, another active region is the Charleston area in South Carolina.

Earthquake Prediction in California and the Midwest

California has 99.7% probability of having a moment magnitude Mw = 6.7 earthquake (same as Northridge event) during the next 30 years. The southern segment of San Andreas Fault has the highest probability of generating such an earthquake in Southern California with a 67% chance of striking Los Angeles Area, while Hayward Fault is the most likely earthquake source in Northern California with a 63% chance of striking San Francisco Bay Area. Larger earthquakes are less likely during the same time frame; 94%, 46% and 4.5% for Mw = 7.0, 7.5, and 8.0, respectively. On the other hand, the probability of a New Madrid earthquake of Mw = 6.0 or greater occurring in the next 50 years is 25-40%, while a repeat of the 1811-1812 earthquakes of Mw = 7.7 is 7-10% according to the United States Geological Survey. However, most structures in the Midwest were not built to withstand earthquake shaking. Moreover, earthquake awareness and preparedness in the Midwest have lagged far behind as compared to the West Coast.

What if your Home is Destroyed or Partially Damaged?

Many people wrongly believe that the United States Government will take care of all their financial needs if they suffer losses in an earthquake which is not true. In fact, the federal disaster relief programs are designed to help you get partly back on your feet but not to replace everything you lose. In the meantime, homeowners insurance does not cover earthquake damage to your home and possessions. Therefore, most of the property damage caused by an earthquake will end up being handled and paid for by you. In addition, you are still responsible for your existing debts such as mortgage, auto loans, and credit card payments even if your home is destroyed or partially damaged.

How to Protect your Assets and Investments?

If you own your home, it is probably your biggest financial asset. You have worked hard to secure your piece of the American Dream to become a homeowner. Your assets and investments made in personal belongings may be at risk when an earthquake strikes as your home will probably have some level of damage. How do you plan to protect these assets and investments from the costs of destructive earthquakes? Earthquake preparedness plans that include retrofitting your home and mitigating its contents are effective ways for protection against earthquake damage. Another option for managing the potential costs is to buy earthquake insurance.

Earthquake Insurance

Earthquake insurance provides coverage for ground shaking that may destroy your home, business, and personal belongings. 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 provided by standard homeowner and business insurance policies. On the other hand, cars and other vehicles are covered for earthquake damage only under the comprehensive part of the auto insurance policy. The states of California, Washington, Missouri, Tennessee, Oregon, Illinois, New York, Kentucky, Florida, and Indiana are the top 10 largest markets for earthquake insurance coverage. Earthquake insurance premiums differ widely by location, insurance company, and the construction material of your home. Older buildings cost more to insure than newer ones. Wood-frame structures benefit from lower rates than unreinforced masonry buildings as they tend to withstand earthquake forces better. A wood frame house in the Pacific Northwest costs $1-3 per $1,000 worth of coverage but less than $0.50 on the East Coast, while an unreinforced masonry home costs $3-15 per $1,000 in the Pacific Northwest but $0.60-0.90 in New York.

Do You Need Earthquake Insurance?

A wise decision on earthquake insurance is crucial if you live in an active seismic region. My family and I survived the 1995 Kobe Earthquake because I decided to live in a relatively new reinforced concrete apartment building although the rent was higher than traditional Japanese wooden houses. The three story main building stood still after the earthquake except an extension that partially collapsed, while many of the surrounding traditional houses completely collapsed. However, the apartment contents were damaged including the refrigerator, a microwave, and a large TV. The answers to the following questions may help you to decide if earthquake insurance is right for you:

Do you know the plausible earthquake hazard at your home? How much would it cost to repair/rebuild your home? Can you afford paying the mortgage while also paying to repair/rebuild your home? Can you afford losing your home equity? How much would it cost to replace your household expensive possessions (furniture, computers, HDTV’s, refrigerators, etc) if destroyed? How much would temporary accommodations cost if you cannot live in your home after the earthquake?

Interesting Facts on Earthquake Insurance

It is surprising to know that only 12% of California residents currently have earthquake insurance coverage down from 33% in 1996 when the devastating 1994 Northridge Earthquake was still fresh in people’s minds. On the other hand, 35% of Missouri homes have earthquake insurance coverage which seems reasonable.

Concluding Remark

On January 09, 2010 the powerful Mw = 6.5 Offshore Northern California Earthquake caused moderate damage to the City of Eureka and elsewhere in Humboldt County. Few days later, on January 12, 2010, a catastrophic earthquake of magnitude 7.0 struck Haiti which is considered to be one of the deadliest quakes in the last four decades. These earthquakes are wake up calls for individuals living in active seismic regions to re-consider retrofitting their homes and mitigating their contents to protect themselves and their families; to develop, update, or maintain their own earthquake preparedness plans; and to re-consider buying earthquake insurance to manage the potential costs of future inevitable earthquakes.