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Key Takeaways
- Most standard homeowners insurance does not cover damage caused by earthquakes.
- In high-risk areas, insurers may offer earthquake coverage as a standalone policy.
- Earthquake policies can have high deductibles, so it’s important to evaluate whether the cost of coverage is worth the potential risk of paying out of pocket.
Earthquake insurance protects your home and personal property from damage caused by seismic events. Most standard homeowners and renters insurance policies do not include earthquake damage, making this type of coverage especially important for those who live in high-risk seismic regions.
Earthquake insurance typically pays for repairs to your home if it suffers structural damage from ground movement during an earthquake. That damage can include foundational cracks, broken walls or the total collapse of your home. Earthquake insurance often includes coverage for damaged personal belongings inside your home, including furniture, electronics and other household items.
Having a clear sense of what is covered by earthquake insurance can help you decide whether you should add it to your homeowners policy. Here’s a look at the key areas typically included in this type of coverage.
Dwelling
If your home is damaged or destroyed in an earthquake, this coverage helps with repairs or rebuilding costs. It applies to the main structure of your home, which includes the foundation and any attached features such as a garage.
Other structures
This type of coverage includes repairs and replacements made to buildings on your property that are detached from your home, such as a garage, shed, carport or fence.
Personal property
If an earthquake damages personal belongings such as furniture, electronics or clothing, this coverage can help you pay for repairs or replacements. It’s wise to create an inventory of your possessions in case you need to file a claim and provide evidence of ownership.
Loss of use
If earthquake damage makes your home temporarily uninhabitable, this coverage helps pay for living expenses, including hotel stays, meals and other necessities while your home is being repaired.
Earthquake insurance can help you repair and replace your personal property, but it doesn’t cover everything. Exclusions typically include:
- Fire damage: If an earthquake results in a fire on your property, look to your homeowners policy for coverage instead of earthquake insurance.
- Vehicles: Any damage to your vehicle should be covered by your auto insurance.
- Flooding: Floods triggered by an earthquake will require separate flood insurance coverage.
- Cost of compliance: The cost of making your home compliant with new building codes during repairs and reconstruction is generally not covered unless your policy specifically states otherwise.
Other common exclusions are theft and vandalism and falling objects. It also includes damage to certain items, such as water supply systems, exterior masonry, landscaping, animals, pools and spas, outdoor personal property, business-related property and vehicles.
Earthquakes are possible in every U.S. state, but some areas are more prone to seismic activity than others. California, home to the San Andreas Fault, is one of the most at-risk regions in the country. Other states with an elevated risk of earthquakes include Alaska, Hawaii, Nevada and Washington. You can peruse FEMA’s earthquake hazard maps to check risk levels in your area.
When earthquakes do occur, the cost of repairs can be financially devastating. No matter where you live, earthquake insurance can still be a wise investment, as seismic events can happen unexpectedly and in unlikely areas. Visit your state’s department of insurance website for localized data and resources as you determine whether earthquake insurance is right for you.
When purchasing earthquake insurance, you can choose to add it as an endorsement to an existing homeowners policy or buy it as a standalone policy.
Endorsement to your homeowners policy
Many insurance providers allow you to add earthquake coverage to your current homeowners or renters policy through an endorsement.
Contact your insurance company to explore options for earthquake coverage, and carefully review the policy terms and premium costs. Include the endorsement in your existing policy if the coverage aligns with your needs.
Separate earthquake policy
If you prefer to keep your earthquake coverage separate from your current insurance company, or if your current insurance company doesn’t offer earthquake coverage, you can buy a standalone earthquake policy from another provider.
Research insurers that offer dedicated earthquake insurance, and compare policy options, including coverage limits, deductibles and premiums. Choose a policy that best matches your needs and purchase it separately from your homeowners insurance.
California residents can find coverage through the California Earthquake Authority, known as CEA, a publicly managed, not-for-profit organization funded by private sources. CEA policies are available through participating insurance companies.
While earthquakes are unavoidable, you can take proactive steps to limit the damage they may cause to your home and possessions. Here are some basic precautions:
- Retrofit your home. Doing so helps make your home structurally resistant to seismic activity, including bracing and bolting the foundation, reinforcing walls, and adding components like steel T-straps, anchor bolts and roof ties for support.
- Secure heavy belongings. Keep beds away from windows and avoid hanging heavy décor above seating or sleeping areas. Secure bookshelves, appliances, cabinets, mirrors and other large items to the walls or floors.
- Add appliance safety features. Secure water heaters and gas-powered appliances to reduce the risk of tipping during an earthquake. Install automatic shut-off valves for gas.
- Apply window safety film. During an earthquake, a shatter-resistant safety film applied to windows can help prevent injuries from broken glass.
- Store items strategically. Place heavy or dangerous materials out of the way. Storage on bottom shelves inside latched cabinets is ideal for preventing accidents.
These safety measures can significantly reduce the risk of injury and damage during an earthquake. While some improvements may be costly, they can ultimately protect your property and financial well-being.
Experiencing an earthquake can be unsettling, but having the right insurance coverage gives peace of mind. If your property sustains damage, here’s how to file a claim:
- Contact your insurer: Reach out to your insurance provider as soon as possible. Provide them with your policy number and details about the damage.
- Document damage: Begin by taking detailed photos and videos of all damage. This provides evidence to support your claim.
- Meet with the adjuster: An insurance adjuster will inspect your property to assess the damage. Be present during this inspection to ensure all damage is accounted for.
- Review the settlement offer: Once the insurer provides a settlement offer, review it thoroughly. If you disagree with the assessment, don’t hesitate to negotiate.
Remember, each insurance company has its own claims process, so familiarize yourself with your insurer’s specific guidelines.
A deductible for earthquake insurance is your out-of-pocket amount before your insurance coverage kicks in. Unlike deductibles for other types of insurance – which are typically a fixed dollar amount – earthquake insurance deductibles are usually a percentage of your home’s insured value, often ranging from 10% to 20%.
For instance, if your home is insured for $300,000 and your deductible is 10%, you must pay $30,000 before your insurance covers the rest. Earthquake insurance deductibles can be high, so it’s important to consider this cost when deciding on coverage.
No, standard homeowners insurance policies typically don’t cover earthquake damage, so you’d need to purchase a separate policy or an endorsement to your existing policy. Without this additional coverage, you would be responsible for all repair and replacement costs resulting from an earthquake. It’s crucial to review your policy details and check with your insurance provider to understand the extent of your coverage.
Whether earthquake insurance is worth it depends on various factors, including your location, the value of your home, and your ability to cover potential repair costs out of pocket. In earthquake-prone areas, the risk of significant damage is higher, making insurance a worthwhile investment to protect against financial loss.
Even in regions with lower seismic activity, the potential for catastrophic damage can justify the cost of coverage. Weighing the premiums and deductibles against the risk and potential repair costs can help you make an informed decision about whether or not earthquake insurance is worth it for you.
