Why is it necessary to buy earthquake insurance?

Do you think an earthquake will not affect you? You may be right, you may be wrong as well. Earthquake kit list although forecasts of such disasters occurring are based on probabilities, some scientists have been right in their predictions.

Let’s go back to the earthquake that struck the coffee in 1999 and killed more than 1,000 people and destroyed about 35,000 homes.

A few months before the disaster occurred, punctually in October 1999, two professors from the University of Quindio showed that there was a high probability of occurrence of an earthquake in that region. However, few believed in this estimate.

Why is it necessary to buy earthquake insurance?

Now history repeats itself. Engineer Hugo Monsalve, director of the Seismological Observatory at the same university, he has been discussing for several months that there is a 87 percent probability of occurrence of an earthquake before the end of the year.

Although this type of study is not a certainty and it is impossible to date to know when an earthquake will occur, you and your family can buy insurance to cover damage to your home for this phenomenon. Even some insurers offer protection to their furniture, appliances and even jewelry are at home.

‘AN EARTHQUAKE WILL NOT OCCUR, THE BETTER NOT BUY THAT MONEY SAVING AND ME’

Law 675 of 2001, which regulates the current regime in Colombia Horizontal Property, emerged after the earthquake in the coffee region and within its purposes is “the social function of property”.

According to Claudia Chávez, manager Solve Your Debt website, this law states that insurance should be seen as a tool with which life and functionality of the same events affecting the stability of the co-ownership is guaranteed.

In this context, property owners should be required to purchase insurance to protect their property from fire and earthquake risks, so as to ensure, at least, its reconstruction.

The unfortunate thing is that the law has not been regulated and there are loopholes that prevent punish those who fail to comply.

“This has led to believe wrong way is not compulsory insurance, and it is common to see decisions not to buy insurance or low-allocate budgets for the purchase of the same amount,” added Chavez.

However, having a policy with earthquake coverage should be imperative for owners of commercial establishments and families.

“Due to the geographical location of our country there is a higher probability of occurrence of these phenomena compared to other countries. Although insurance does not prevent such events from happening, if you generate tranquility to people because it protects their heritage. In the case of suffering material losses can restore your business or purchase a new home, “he said Juana Llano, Manager of Enterprise Business Insurance Sura.

For this reason, buying insurance should not be seen as an additional expense. In addition, if an obligation by law, disaster insurance should be taken as an investment that protects against any eventuality.

In the case of co-ownership, shared by two or more properties, manager Solve Your Debt remember that there is a compulsory insurance commons that functions as a tool, with all buildings or residential complexes subject to horizontal property regime which helps protect property against various risks and ensure its reconstruction.

WHAT IS COVERED?

Insurance should be viewed in a comprehensive manner, ie covering various risks to which the goods are exposed.

Earthquake coverage is an optional coverage within the assurance of movable and immovable property, for which the policies of this type always go with a basic coverage includes events that generate material damage resulting from fire, lightning, explosions, floods, including others.

“Within the coverage of earthquake protection is offered against catastrophic natural hazards like earthquakes, earthquake, volcanic eruption, tsunamis, tidal wave and storm surge, when these affect the real or personal property,” said Juana Llano.

If you wish, you can include optional coverage for terrorism, civil liability for damage to third parties, damage to machinery and emergency assistance.

HOW MUCH?

The value of the insurance premium is calculated based on the individual characteristics of the property to ensure within which highlights the geographical location of the property, the activity that it develops, insured values, the required coverage, the year and type of construction.

An exercise done by Portafolio.co showed that for most areas of the country, the annual cost of fire insurance and earthquake is calculated on the market value of the constructed area of ​​the property.

In the case of earthquake insurance on average 1.30 pesos per $ 1,000 of the market value of the destructible part of the property are paid while in case of fire varies between 1.70 and 2.20 pesos.

If you only want to insure their property, contents insured values ​​must be between 10 and 150 million.

For insurance the average rate is 3.2 per 1,000. That is, that for a building of 100 million, the policy would cost about 320,000 pesos plus VAT for one year of protection.

RECOMMENDATIONS TO ACQUIRE TIME INSURANCE

Before hiring a safe, compare and analyze the offer is in the insurance market. In addition, clear all doubts about the cost and benefits you will have with each of the options.

“Take an inventory of the assets you have at home, this will allow you to give a set value as possible to reality,” advises Claudia Chávez.

It is also important to be aware of underinsurance, because according to the manager Solve Your Debt, which occur when the value of the sum insured is less than the actual value of the property covered: “Insurers try to avoid this situation by asking in their policies that the declared value is equal to the actual value of the insured property or declaring that the insured value is less than the actual value of the asset “.

In any case, insurance will help avoid any loss resulting from a catastrophe, and most importantly, have one protect the heritage and pocket.

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