Connecticut Issues Consumer Advisory on Earthquake Insurance

January 15, 2015

The U.S. Geological Service has reported a series of minor earthquakes in parts of eastern Connecticut this week, including a 2.0-magnitude earthquake Thursday morning near Plainfield, Connecticut.

The Weston Observatory of Boston College says a series of small earthquakes in the Northeast is not unusual because the eastern U.S. is atop a tectonic plate affected by geological pressure, the Associated Press reported Wednesday.

Due to the recent seismic activity in eastern Connecticut, the Connecticut Insurance Department is offering the following consumer information on earthquake insurance.

• Not standard coverage: Earthquake coverage is not included in a standard homeowner’s policy but can be purchased for an additional cost.

• Deductibles: Earthquake insurance generally carries a deductible, usually in the form of a percentage rather than a flat dollar amount. Deductibles can range from 5 percent to 25 percent of the replacement value of the home. To understand how a deductible is calculated read the policy’s “declaration page,” the summary usually attached to the front of the policy, or talk to the insurance agent.

• What is covered: Earthquake insurance covers repairs needed because of earthquake damage to homes and may include detached structures, such as garages. It covers the cost to remove debris and also pays for extra living expenses if the homeowner has to relocate during rebuilding.

• Moratorium: Insurance companies may put a hold on selling earthquake insurance for a period of time in an area if seismic activity is present.

• In buying any new insurance, the Connecticut Insurance Department advises consumers to discuss their needs thoroughly with their agent or company to understand what they are buying, what it covers, what it costs and what is excluded. Connecticut consumers who have questions, concerns or complaints about any insurance matter can contact the Insurance Department’s Consumer Affairs Unit online at www.ct.gov/cid/cwp/view.asp?q=254352. Consumers can also email the Consumer Affairs Unit at cid.ca@ct.gov or call the consumer helpline at 800-203-3447 or 860-297-3900.

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