Category Archives: Insurance Shopping Tips

Do You Need to Buy Earthquake Insurance?

April 5, 2024

(Originally published March 3, 2011)

Most residents of Arkansas never thought they would need to purchase earthquake insurance. But the last few months have been particularly active. According to the U.S. Geological Survey, there have been nearly 75 rumbles in the New Madrid Seismic Zone since February 22, 2011. There have been more than 25 temblors ranging in magnitudes from 2.0 to 3.8 since a 4.7 magnitude earthquake was recorded near Greenbrier on February 27, 2011. This earthquake’s effects were felt in Conway, Cabot, Little Rock, Morrilton, Russellville, Heber Springs, Searcy, and Batesville. Rumbles were felt as far away as Jonesboro, Harrison, Pine Bluff, Hot Springs, Rogers, Springdale, Fort Smith and Fayetteville. Standard homeowner, condo and rental insurance policies do not cover damage caused by an earthquake. So, many Arkansans are now shopping for earthquake insurance.

Unfortunately, not many companies write earthquake insurance in Arkansas. Of those that do, State Farm writes nearly 1 in 4 policies. USAA covers nearly 1 in 8. Others include Travelers, Shelter Insurance, AXIS Capital, Zurich, Nationwide, HCC Insurance Holdings, AIG, and Liberty Mutual.

Smart shopping for earthquake insurance follows the same basic rules as purchasing other types of insurance: know what’s covered and what’s not covered. Understand your deductible(s) and how they are applied. Understand how the amount of your premiums are determined and when they are due.

Other questions to ask:

Does the policy cover only the dwelling? Will the policy pay for the contents of your home?

Will the policy cover additional living expenses if your home is badly damaged or destroyed?

Are accessory and adjacent structures, such as garages, also included? What deductible must you pay before the insurance kicks in?

What are the exclusions or limitations to coverage, if any?

If you determine you need earthquake insurance, be sure all of these questions are asked and answered to your satisfaction. Be certain you understand exactly what you are buying and that you are purchasing it from a reputable agent who is licensed to sell insurance.

Full Auto Insurance Coverage on Older Vehicle?

April 1, 2024

Last week, a friend asked me a question regarding her car insurance. She said “I know you’re all about getting the best deal and saving money. I have a question about my car insurance. My Chevy Malibu is now 8 years old. Is it worth keeping full coverage (collision and comprehensive), or should I drop them and just keep basic liability coverage?”

Well, I’m no insurance expert, but I do like to save money whenever possible. Generally, a car that old does not have enough remaining value to justify the higher premiums for collision and comprehensive auto insurance coverage. However, her current financial situation is a bit precarious. She’s currently unemployed and thus would not be able to afford to replace her car if it were damaged or destroyed. So, I advised her to keep her collision and comprehensive insurance coverage with a deductible of at least $500. I would certainly keep uninsured and underinsured motorist coverage. These days, more drivers than ever have no insurance. Their numbers are increasing as the economy worsens. You don’t want to be their next victim.

I also told her to shop around for the best deals on car insurance. Rates vary greatly between companies. I advised getting quotes from the majors: State Farm, Progressive, Geico, Nationwide, and Allstate. Also, check with a few independent agents to see what they can come up with. Shop and compare rates as well as coverage and service. A cheap premium is worthless if your policy is written by a no-name company who won’t be there when you need to file a claim. As with everything you buy, the best deals go to the wise shoppers who do their homework. Auto insurance is no exception.