Public liability cover is vital because all corporations are at threat to some extent. Albeit nothing very bad has yet happened to your corporations belongings that is no guarantee that it won’t at some point in near the future. If an individual is injured, or their belongings lost, it is your obligation to properly refund them. This outlay can be unbearably expensive, depending on the particular case. Looking for business insurance? Contact Insured Risks for Professional Indemnity Insurance.

Luckily, you do have numerous methods to secure yourself for this possibility. Procuring public liability insurance lets you to breathe to some extent easier. Even if a specific claim is costly, the insurance business will be around to give a safety net. It is their contractual responsibility to keep you sheltered from claims and legal expenses brought against you. This leaves you available to concentrate on actually doing business, instead of thinking about what could happen. The following are numerous instances of times when public liability cover have come in helpful.

Proprietors of plumbing businesses generally get the job done fast and right. Yet now and then something can go terribly wrong. For instance, if you inadvertently damage a customer’s gas pipes while on the job, affecting possessions such as personal computers & carpeting, public liability insurance will be there to pick-up the costs.

An additional case study is that of a promotions business. If a client were to crack an ankle in your place of work, even if it’s not your fault, you would be held legally answerable. Fortunately, with public liability cover you would not have to resolve the claim yourself.

In a similar case, physical injury caused to a spectator by a worker on a building site is the accountability of the organisation’s director. This sort of claim can become exceedingly costly in fact, unless you buy the appropriate protection.

In today’s market the cheapest and simplest life insurance is term life insurance. Term insurance is especially cheap if you are young, and in good health, in this case your premium may be as low as ten or fifteen dollars a month for $200,000 worth of coverage. Although term insurance is more temporary than some people may like, it does offer a reasonable amount of coverage at a monthly premium most people can afford.

You’ll get the best deal if you figure out what type of policy will fit your needs. Generally the death benefit should cover five to ten times your annual salary. Life insurance needs are based on the needs of your survivors, so there are other things to consider when determining how much the death benefit should be; for example if you have a child that has disabilities or special needs you may need to increase the amount that will be received in the death benefit to accommodate their needs if you do pass away. You will want to ask yourself questions like; if I pass away how long will the family need to be covered financially before other sources of income can be found? Will any of the children be pursuing higher education and need financial assistance? Is my home paid for? Are there other major debts? How much will the funeral cost? Will my spouse be able to retire? If you do not have dependents, or if you do not have any debts to pay off, you may consider getting a plan that covers only funeral expenses. Making sure you get just enough coverage will ensure that you are not paying for extra money that is not needed.

The next decision to make is to decide if you want renewable term life insurance or level term insurance. With renewable term you have the right to renew the policy (rates may be higher) regardless of the state of your health. This is a major advantage because it allows a person to still have life insurance even if their health would disqualify them from getting any other insurance. With renewable term insurance it is possible to switch a policy to another company if they have lower rates, but you may want to be careful with this practice, some companies do not like to take on people who have a history of changing business often. Level term provides the same premium throughout the life of the policy whether rates go up or down.

Now that you have decided how much you need and what type of term insurance you want, it will make it much easier to shop around for the best deal.

Chris Simons is a prolific freelance writer. You are welcomed to visit http://life-insurance.cyberinformer.com, for more information on Cheap Life Insurance

If you live in NSW and drive a car then you’ll know that each year you need to renew your cars ctp insurance or green slip. Prices for acquiring your yearly green slip can vary (sometimes quite dramatically) in NSW when comparing the 7 major insurers who are able to provide it. These insurers are:

• AAMI,
• Allianz,
• CIC Allianz,
• GIO,
• NRMA,
• QBE,
• Zurich

Choosing between these different options will often be a case of going with the cheapest alternative however you may also want to look carefully at what each company is offering with it’s ctp insurance. Sometimes the different insurers will trial providing more insurance than is strictly necessary in a compulsory third party insurance policy. For example, you may receive items that would normally be found in a comprehensive policy such as fire or theft protection.

Of course, if you have comprehensive insurance anyway, this may not be an issue for you however you may find that you can save money by choosing the right selection of options from across the board of insurers for your own ctp green slip insurance.

If you carefully compare each of these different insurers, depending on your current situation (driving history, type of car, drivers age etc) you may find that there is a large difference (even up to the $200-$300 range) in the price of green slips from these different insurance companies.

Do some quick research for your ctp green slip insurance as it may be able to save you some money not just this year but each year after this too. Good luck on finding the right ctp green slip insurance!

2005 marked a record year for hurricanes in the Atlantic Ocean and Gulf of Mexico, with weather reporters resorting to using the Greek Alphabet to come up with names for hurricanes and tropical storms headed towards the United States. Unfortunately a few of these hurricanes, including Dennis, Katrina and Wilma causes major destruction on both the Atlantic and Gulf of Mexico sides of Florida.

Because Florida is right in the midst of hurricane alley for nearly half the year, finding affordable Homeowners insurance coverage is nearly impossible for most homeowners and sustaining and repaying those Homeowners insurance policies is just as impossible for the actual insurance companies.

For quite some time, in the 1980s and 1990s, many Florida residences were covered by the state run insurance company, called the Residential Joint Underwriting Association. Only recently have large private Homeowners insurance companies, like Allstate, begun taking on homeowners insurance policies in sections of Florida, along the coastlines and in the southern part of the state, where hurricanes are more likely to occur.

Whether going through the state run RJU association or going through a private home insurance agency, there is no question that Homeowners insurance will be extremely expensive anywhere near the coast in Florida. The same home in Ohio may cost three times less to insure than it would on the coast of Florida, simply because of all the added coverage for hurricane season.

Since most basic insurance policies only cover certain natural disasters that could occur anywhere in the country, most often hurricane damage is not included in this policy. For that reason, Florida homeowners have to go about purchasing extra hurricane insurance to make sure their home will be covered in case hit by one of these ocean storms.

A law was recently passed in 2005 in Florida that requires plain language on insurance policies so that homeowners can easily understand the terms of their policy without being confused by the heavy jargon. Before this, many Florida homeowners were left to fend for themselves or to apply for Federal or Florida aid because many did not realize that even hurricane insurance often does not include flood damage.

Of course this can be tricky to distinguish and this is where many homeowners found themselves at a loss. Even if the flooding is caused by a storm surge of rising water from the hurricane, this is not covered by the hurricane because it is not considered damage due to the high winds or rain of the storm, but is instead caused by the ocean waters rising.

If Florida homeowners are in an area that could be considered a storm surge area, usually even up to 25 feet from the ocean, then they need to consider also including flood insurance as a separate clause to their Homeowners insurance. Be sure to discuss with your insurance agent exactly what types of water damage are covered in the hurricane insurance policy and the flood policy to make sure you are covered from all angles when encountering a hurricane.

Currently legislation is in the works that will limit the amount of surcharges that Florida homeowners can be charged to help prevent price gouging because of the area that Floridians live in. If legislation is passed, this will help level out private and public insurance rates for Floridians, making it easier to acquire insurance from year to year even though they live in an extremely high risk area.

If you are a new resident of Florida and have moved to the state between the months of June and November, hurricane season, you may not be able to acquire hurricane insurance for the first season, as many insurance companies put a block on new hurricane insurance policies until after hurricane season is over.

This is to prevent those who may just acquire the insurance temporarily and then get rid of it after hurricane season is over. Before closing on the home, consider adding the current Homeowners policy into the contract on the home to ensure that you will be covered for the first season. If this is not possible, you may be able to find insurance to cover a hurricane but it could cost a pretty penny.

Credit: Ian W Anderson of homeownersinsurance.cc, the homeowners insurance information site. For more homeowners insurance information and articles like this one visit: Homeowners Insurance

Do you like to spend all day being sitting around? Fixed income is good enough for you? Do you feel economic stability is not a priority right now?

Well, if your answer to any of above questions is “Yes”, you should accept the fact youhave a very high chance of being unsuccessful.

But if, in the other hand, you are proactive, if you need to build a future for your family and yourself, establishing financial stability with a job that takes advantage of all your skills, then you should strongly consider a career in the life insurance world.Why choosing a career in insurance?

Well, one of the main reasons is that you get to help people. Nothing pays more that having someone looking into your eyes and saying “Thank you, you really helped me”. You will be the one who provides trustful care to those who need it. Moreover, as you help them, you will be setting up a safe, stable future for you and all those who depend on you.

If you have good salesperson abilities, patience and good people skills, then success is a piece of cake. Remember, everyone needs life insurance, because nobody wants to leave his family uncovered when the unexpected happens; so it’s just a matter of time: eventually they will seek for an agent to get themselves a policy. That agent could be you!

So, this is your time to make a choice. You are good for many things, there is a number of careers you could choose; but have in mind that the right decision is what separates the successful person from the unsuccessful one. Of course, you do not want to be unsuccessful. Why should you? You have the skills, you have the power, you have all it takes to success in the insurance world. You just need to take one step: get a life insurance career. Choice is yours.

If you find this information useful you should visit the site http://www.official-insurance.net where you will find lots of interesting articles related to this topic, all original and wrote by Andreea Dinescu.

Health Insurance; COBRA; OBRA; HIPAA; Medicare. If asked, could you state that you knew that all 5 of these topics had the same thing in common: medical insurance coverage for you and, perhaps, your family? Would you know the qualifications for each? Well, in this article, we will discuss them. For a timeline that depicts, graphically, the time relationship between them, please see the timeline in www.disabilitykey.com.

HEALTH INSURANCE Coverage from Work

If we are lucky, we, and/or our spouse, work for a company that provides, as a benefit, health insurance coverage for us and our family. If so, we are very lucky. Even if that is true, there are some key things that you might want to look at to see if you have ENOUGH coverage.

1) From your Human Resources Department (or wherever else you would go to get information about your health insurance) get what is called a “Summary Plan Description” (SPD). This document should be kept where you can always find it, as it contains all the information you will need about what your insurance covers and what it doesn’t.

2) Look up “Coverage” and “non-coverage” in your SPD.

These will tell you what your plan covers and doesn’t cover. You need to see if, perhaps, you or one of the covered members of your family has a condition or circumstance that might not be covered, where you need additional coverage. For example, let’s say that your family has a history of cancer; perhaps your plan restricts the number of hospitalization days for care; or, restricts the days per condition. In this case, (like my children) you might want to get additional “cancer insurance” (I think that AFLAC might provide this type of coverage).

It would be a good idea to contact a Health Insurance benefit Broker and ask him/her to read your SPD and see if you have any gaps in coverage. They then can help you supplement coverage BEFORE YOU NEED IT!

NO HEALTH INSURANCE COVERAGE

You might be one of the growing members of our society that, through one circumstance or another, does NOT have health insurance coverage for your family. In this case, I strongly encourage you to contact a Health Insurance Broker and get immediate coverage of what is called “catestrophic” (not sure if I spelled this correctly) coverage. In this type of coverage, you will generally have large deductibles, but will have coverage if, say, one of you has to go into the hospital.

CONTACTING A BENEFITS INSURANCE BROKER

Whenever you call or email a Health Insurance Broker, it is very important to prepare ahead of time. WHAT, specifically are you looking for; how much can you afford to pay every month; what circumstances do you want to make sure that your family is covered for. In this way, you can make sure to focus on your critical needs.

COBRA

COBRA is an acronym ( how can I spell acronym correctly, yet not be sure that I spelled catestrophic correctly?) that stands for: Consolidated Omnibus Budget Reconciliation Act. Basically, it is a federal law that allows you to pay for your Company-paid health insurance, as an active member, if you no longer work for that company for, generally 18 additional months.

1) COBRA is “triggered” (that is, you, or a covered member of your family, become eligible for COBRA) by events such as the following: resignation from the company; termination (FOR ANY REASON) from the company; divorce of a spouse; a covered chile’s birthday makes them ineligible for coverage. These are the main “triggering” events for COBRA.

2) Now, when eligible for COBRA, you will be asked to pay for 100% to 105% of the company’s employee/employee and family coverage amount. You should get a letter from your company explaining what that amount will be. BEFORE YOU DECIDE TO TAKE COBRA, there are some important things for you to consider.

What will be your cost, and what will be the coverage for that cost?
Sometimes the cost is too much for the coverage. In these cases, you might want to select HIPAA coverage, instead (see HIPAA below).

Or, you might just want to get catestrophic coverage as was mentioned earlier, and wait for full coverage under your next job.

Part of this decision should be whether or not you or a member of your family has what is called a “pre-exisitng coverage” condition.

Here again, before automatically taking COBRA, it would be wise to contact a Benefits Insurance Broker and give him/her all of your options, and get their input. I have worked extensively with a Benefits Insurance Broker, and he is absolutely fantastic!

OBRA

What, you ask, is OBRA? I’ve never heard of it, you say, and no one I know has heard of it either! Well, that’s because, 99% of Human Resource or Benefit folks that I know have never heard of it! OBRA is a federal law that was passed that extends COBRA for an additional 11 months FOR DISABILITY PURPOSES ONLY!! Why, you ask, is this important? Thanks for asking, let’s see if I can explain.

If you are as nieve (did I spell this wrong too? sorry!) as I was when I first started looking to bridge my health insurance from working to Medicare, I assumed that when I got through all of the hoops to qualify for SSDI (Social Security Disabililty Insurance) I’d IMMEDIATELY be eligible for Medicare, RIGHT??? WRONG!!!!

When you FINALLY qualify for SSDI, you have to wait for 5 months before you get your first check. AND, the rules state that, you are eligible for Medicare 2 years (24 months) FROM THE DATE OF YOUR FIRST SSDI PAYMENT. Well, if you add 24 + 5 you get, 29 months between qualifying for SSDI, and Medicare coverage.

OK, I said earlier that COBRA is for 18 months of coverage. Well guess what 18 months of COBRA + 11 months of OBRA equal - 29 months!

BUT, there are two catches to OBRA; first of all, you have a small window of 30 - 60 days to apply ( this window opens the date of your SSDI approval); and, it can cost up to 150% of your plan coverage amount. BUT, if you have a “previously existing condition” this might be the best way for you to proceed.

Again, it is important to contact a Health Insurance Broker to help you with the risk/cost ratio of all of these situations.

It is also improtant to know all of these deadlines as you plan to ensure that you and your family have important health insurance coverage.

HIPAA

HIPAA is a federal law that is called, briefly, the “portability” law for health insurance. What that means is that when you leave a group (read company-paid plan), the carrier that provided that plan, must offer to you, another plan, different from COBRA, when you leave the group coverage. Generally this will be what is called a “bare bones” plan. Again, the best thing for you to do is to call/email a Health Insurance/Benefits Broker with all of your information: SPD, COBRA info, HIPAA info, needs, cost limits, and let him/her help you find the optimum plan coverage for you.

MEDICARE

OK, now, finally, we’ve reached Medicare! BUT (you really didn’t think it would be that easy, did you?) if you have qualified for Medicare because of disability, there are RESTRICTIONS (of COURSE there are!).

First of all, if you are qualifying for Medicare because of disability, you are probably under the age of 65 - normal retirement age.

Medicare coverage does NOT cover prescription drugs, which, those of us with disabilities probably need, and which cost lots.

But, Congress prescribed that states (all but 11) offer what is called “Medicare supplement” plans, some of which do offer prescription coverages.
BUT, these plans ARE NOT REQUIRED TO, and do not, offer these medicare supplement plans that offer prescription coverages to folks who qualify under age 65! So, if you are qualifying because of disability, your medical insurance plan doesn’t cover one of your primary cost expenditures!

Here again is where you need to contact a health insurance/benefit broker. Again, he/she can work with you, and your specific circumstances, to get you the coverage you need.

Hope that this information was helpful to you. If you have any questions, please feel to ask them by commenting on this blog, and I’ll be happy to get you an answer.

About Disabilitykey.com & Carolyn Magura:

Disabilitykey.com is a website designed to assist each person in his/her own unique quest to navigate through the difficult and often conflicting and misleading information about coping with disabilities.

Carolyn Magura, noted disability / ADA expert, has written an e-Book documenting the process that allowed her to:

a) continue to work and receive her “full salary” while on Long Term Disability; and

b) become the first person in her State to qualify for Social Security Disability the FIRST TIME, in UNDER 30 DAYS.

Click here to receive Carolyn ’s easy-to-read, easy-to-follow direct guide through this difficult, trying process. If you are disabled, don’t let this disabiling process disable you. Read Carolyns Disability Key Blog.

If you are considering purchasing life insurance, an overview of
the available types should prove helpful. This article will
briefly discuss the difference between whole and term life
insurance, as well as some variations on whole life insurance.

The easiest way to understand the difference between whole life
insurance and term life insurance is to look at what is meant by
their names. When you purchase whole life insurance, you are
covering your “whole” life - as long as you own the policy, it
will pay a benefit when you die. What that benefit is depends on
the value of the policy at the time of your death, but you own
the policy even if you are no longer making payments on it.
Whole life also accumulates a cash value on a tax-deferred
basis. In addition, whole life can pay dividends throughout the
life of the policy.

Term life insurance, on the other hand, is purchased for a
certain term, or period. As long as you die within that period,
term life insurance will pay an agreed upon amount to your
beneficiaries. It will not pay if you cease to make payments or
if you die after the term has expired. In addition, term life
insurance has no cash value.

Two other aspects of whole versus term life insurance should be
pointed out. The first aspect is that premiums for whole life
insurance are higher to begin with, but remain steady over time.
On the other hand, premiums for term life insurance are lower
near the beginning of the policy, but increase over time.
Another aspect is that you can borrow against the cash value of
a whole life insurance policy. This is not possible with term
life insurance, since it does not have a cash value. There are
two variations of whole life insurance that need to be
mentioned. The first is a more flexible form of whole life
called universal life insurance. With universal life insurance,
you can adjust (within certain limits) the premiums as well as
the benefit amount over time to suit your financial situation.
This is made possible by placing the premiums in a fund that
accumulates based on the interest rate. As with normal whole
life insurance, this type of policy has a cash value that can be
borrowed against.

The second variation on whole life insurance is called variable
life insurance. This type is similar to universal life
insurance, except that the premiums in the fund are tied to the
financial markets rather than to interest rates. While the
potential for growth is greater with this type of insurance, the
potential for loss is greater as well.

As you can see, there are some choices to be made when
considering the purchase of a life insurance policy. Now would
be a good time to use some of the other resources at this site
to help you decide on the life insurance policy that is right
for you and your family.

Automobile insurance is one of those things in the budget that is always going to be there. There are very few places in America that permit you to drive vehicles without insurance and so it behooves each and every one of us to get a better handle on our own auto insurance coverage. The industry is changing a bit because the competition is strong. There are new and creative auto policies on the market today. The trend that has gained the most momentum is the self-insuring concept. Higher deductibles is the weapon that the customer can use to lower rates significantly. Higher deductibles means that the policyholder has decided to take on more of the risk for the automobiles insured. The day of low collision deductibles is all but gone. Lower deductibles no longer warrant the high premiums. There is too much money to be saved with higher deductibles.

Lowering the Rates for Young Drivers

Young drivers on newer vehicles that have a lien holder’s interest will raise the auto rate significantly. The collision and comprehensive rates for drivers under 21 years of age are very high. A young driver on an older vehicle without the collision and comprehensive coverage will lower the rate significantly. There are discounts for young drivers who have completed a qualified drivers training course. Some companies have good student discounts on students with a grade point average of 3.0 or better. When the young driver reaches 21 the rates begin to drop for most companies.

Senior Citizen Discounts - Most companies have discounts for people age 55 and older who are retired or work less than 20 hours a week. There are mature driving courses that can also give the senior citizen a discount.

Multi-Policy Discount - This discount is available when you insure both your auto and home with the same insurance company.

Tort Options - Some companies offer discounts for a limited tort option. Tort is your ability to sue for pain and suffering. Limited tort rates in some states reduce the overall premium of the policy up to 30%. Ask your insurance company about the tort options in your state.

Online Health Insurance
Car Insurance Online
Home Owners Insurance

Many homeowners took out endowment policies expecting them to pay off their mortgages but have recently been alarmed to discover that this will not be the case. Your endowment could be thousands of pounds off target with no way of you finding this extra cash.

What Can I do?

This is where endowment compensation - or endowment redress - is used. But how much compensation could you receive?

The insurance companies aren’t paying compensation according to how much of a shortfall you are predicted. If your claim is upheld, the endowment company is likely to make you an offer for compensation and an offer to cash in the policy. Look at this carefully and speak to an independent advisor to find out what is best for you.

What Else Does An Endowment Policy Cover?

One important point to remember is that part of your endowment payments have included a payment for life insurance. If you cash in your endowment, then you will need to arrange a new policy to replace the endowment.

Also, looking back over the period when you have been paying for the endowment, some of the payments have been used to pay a life insurance.

How Will The Insurance Calculate Compensation?

So how much compensation could you receive? The insurance company will look at the monthly payments you have made into your endowment policy. From this they will make an allowance to account for the life insurance aspect.

Then they will also look at how much interest you have been paying each month to keep the mortgage level. From these complicated figures, they will work out if you had instead been sold a repayment mortgage, how much would you have paid off. Then they compare this to how much your endowment is worth now if it was cashed in.

In short, if by paying the monthly payments you could have paid off more of your mortgage than your endowment has earned, then the difference is the compensation you are entitled to.

Was My Offer Correct?

So how do you know whether your offer of compensation is correct? That’s where a specialist solicitor helps you. Not only will they deal with the paperwork and any appeals for you, they will also check you are given the maximum compensation. After all, they are being paid a percentage of the compensation (not including the cash in value) so the more compensation you receive, the more they receive.

Where Now?

To find out whether you can claim, or to speak to a solicitor without any obligation, leave your contact details or take the 60 second test. It only takes a minute to find out the answer or you can just leave your contact details and someone will call you back.

Keith Lunt runs several financial sites including http://www.endowment-claim.org.uk
You are welcome to reprint this article as long as all links are included and work.

As the water began to drain from New Orleans in 2005, we learned that most of the homeowners in New Orleans did not have flood insurance, since they were supposedly in “low risk” areas. The over 60% of homeowners will need to depend upon their own savings, and limited federal assistance, to rebuild New Orleans – at an uncalculated cost for homeowners and taxpayers.

Could that level of disaster, especially that level of uninsured disaster, happen in California? Less than 15% of California homeowners currently carry earthquake insurance, due to its high cost, the “can’t happen to me or my house” factor, and mortgage providers not requiring coverage. The next big quake will result in billions of uninsured damage – but is earthquake insurance really worth the high cost?

How Did We Get Here?

The state of California requires that all homeowner’s insurance providers to at least offer earthquake insurance (albeit, at a high cost). Until 1994, it was widely available – but the high damage costs of the Northridge earthquake resulted in 97% of homeowner’s insurance providers pulling out of the state the California. In response, the California Earthquake Authority was formed by the California legislator to provide earthquake insurance.

What Is the California Earthquake Authority, and How Does It Work?

The California Earthquake Authority provides two-thirds of the earthquake policies in California, sold through their member providers, like Allstate and State Farm. A homeowner purchases the policy through their regular insurance agent, but the policy is actually a CEA policy.

The CEA currently has about $7.2 billion to pay claims, which it states is enough to pay foreseeable damages (Loma Prieta in 1989 had $6 billion in total damages). If the damage claims are more than $7.2 billion, then each claim would be paid a prorated portion of their losses – unlike a regular insurance company, which promises to pay the actual damages under the insurance policy. The state of California cannot help pay the claims out of general funds.

The policies also have a high deductible – usually 15% of the value of the dwelling. In other words, your home must be damaged more than 15% of its value before the insurance starts paying. So, this insurance is not for cracks in the driveway – it is for significant structural damage to your home. The policy also pays for limited contents (starting at $5K) and loss of use (starting at $1500).

Why Is Earthquake Insurance So Expensive?

Insurance policy premiums are calculated based on probabilities – the probability that a house like yours in a neighborhood like yours will catch fire, or a driver like you will have an accident. With data from millions of homes, these probabilities can be calculated with reasonable accuracy. But, no one can reliably predict the probability that there will be an earthquake strong enough to damage your home.

And, as you can imagine, damages from an earthquake, flood, or hurricane, are widespread, over potentially thousands of square miles – instead of one or a few dozen homes, as in a fire. As such, the insurer would have to pay either zero claims, or billions of dollars of claims – too much variance to reasonably plan for or price accurately.

Are We Really At Risk Here in San Jose?

According to the USGS, there is a 62% probability that there will be an earthquake of 6.7 or greater (like the Northridge quake) in the Bay Area in the next 30 years. In my zip code (San Jose 95126), USGS calculates a 80% chance of a 6.0 earthquake and a 20% chance of a 7.0, in the next 30 years. Whether you consider that to be a high risk depends on your risk tolerance for earthquakes – I consider that a high risk of a moderate earthquake and a somewhat low risk of a terrible earthquake, over the next 30 years.

But like any issue involving real estate – it is all local. Where your home is actually located significantly affects your risk – bedrock, reclaimed land from the bay, soil type, nearby streams, actual distance from the epicenter – all can affect potential damage.

But of course, many earthquakes occur where the USGS was not even aware of a fault line – and we never know when or where it will happen, until it happens.

Should I Obtain Earthquake Insurance?

Factors to Consider:

• Could you afford to pay for the rebuilding your home from your own savings & investments?
• Can you afford to pay the high cost of insurance, indefinitely?
• Could make payments on your current mortgage and on a new loan to rebuild?
• Can you mitigate your potential losses by bolting your roof to the walls and the walls to the foundation, for example?
• What is your tolerance for the risk of an earthquake?
• What is the risks of your current home construction (type, age, foundation)?
• What are the risks of your specific location (soil type, distance to known faults)?

Are the Costs Worth It?

Let’s assume that you have a home that would cost $250K to rebuild, you will own the home for the next 30 years, and your earthquake premiums are $1200 per year. Over the next 30 years, that would be a total of $36,000 in premiums (assuming your premiums do not increase, to simplify calculations).

Instead of purchasing insurance, you invest the premiums in a diversified mutual fund. With an 8% annual return, you would have $135,000 (pre-tax) in year 30.* But of course, you only have that total in year 30, not in year one – meaning that if the earthquake happens tomorrow, you don’t have the money.

The deductible is another big turn off for many homeowners. The insurance pays only for large structural damage, not broken dishes or cracked driveways – meaning that it is less likely you will use it. However, be aware that you will not need to come up with the cash for the deductible – you may either opt to not undertake those repair or rebuilding costs, or you can apply for an SBA loan to pay for the deductible (assuming a federal disaster area is declared).

Why Not Just Get Federal Aid, or “Walk Away” and Let the Bank Have the Property?

The federal government would probably provide access to SBA loans, if the area is declared a federal disaster area (no small business required). However, the $200K maximum SBA loan may not be enough to rebuild your home – and, it is a loan that you need to pay back (in addition to your current mortgage).

If you have refinanced your mortgage, you have a recourse mortgage – which means that not only can the bank foreclose on the property in case of non-payment, the bank can also come after your personal assets and future income in case of non-payment. So you cannot just walk away, especially if you have a good income and some personal assets. The bank may help out by deferring payments for a few months, but you still must pay back the loan.

Last Thoughts

We have earthquake insurance on our home. Our home was not yet built in the 1906 earthquake (so who knows if it would stand), it is 75+ years old and is not bolted to the foundation, and we have a refinanced mortgage. For my family, the insurance premiums are worth peace of mind in case of a major earthquake disaster. That’s exactly what insurance is for – the “you never know.”

*calculations ignore inflation

Elizabeth Potts Weinstein, JD, a licensed attorney and Registered Investment Advisor, is the founder of Potts Weinstein Financial Consulting, a financial and estate planning firm, headquartered in San Jose, California. The firm specializes in providing fee-only, hourly financial planning, estate planning, and investment advice for people from all walks of life and income brackets. For more information about Potts Weinstein Financial Consulting, or to subscribe to our monthly eZine ‘Prosper!’, please visit http://www.pottsweinstein.com