If you live in an earthquake-prone region, understanding earthquake insurance basics is essential for protecting your home and finances. Many people mistakenly believe their standard homeowners insurance covers earthquake damage, but it usually does not. This type of coverage must be purchased separately or as an add-on.
Learning about earthquake insurance can help you prepare financially for unexpected seismic events, ensuring you are not left with huge repair bills.
What Is Earthquake Insurance?
Earthquake insurance provides financial protection if an earthquake damages your property. It covers repairs to your home and replacement of personal belongings damaged during the quake. Typically, this insurance is sold as a separate policy or as an endorsement to your existing homeowners insurance.
Understanding these basics helps you avoid surprises and gives peace of mind if the ground starts shaking.
What Does Earthquake Coverage Include?
The policy generally covers:
- Structural damage to your home
- Loss or damage to personal property inside your home
- Detached structures such as garages or sheds
- Additional living expenses if you must stay elsewhere during repairs
Keep in mind, earthquake insurance usually comes with a higher deductible than standard policies — often between 10% and 25% of your home’s insured value.
What Is Not Covered by Earthquake Insurance?
Certain types of damage are excluded from earthquake insurance, including:
- Flood damage caused by earthquakes or tsunamis
- Fire damage after an earthquake (covered under regular homeowners insurance)
- Damage to vehicles, landscaping, pools, or fences
- Land movement such as landslides or sinkholes
Knowing these exclusions is crucial to avoid unexpected expenses after an earthquake.
For example, flood damage caused by earthquakes isn’t covered by earthquake insurance. To learn more, read our detailed guide on flood insurance explained.
Who Should Consider Earthquake Insurance?
If you live in seismically active states like California, Alaska, or the Pacific Northwest, earthquake insurance is especially important. Even in regions with lower earthquake risk, the financial impact of a quake can be severe.
Check your local risk level through resources like the USGS Earthquake Hazard Maps to decide if this coverage makes sense for you.
Factors Affecting Earthquake Insurance Costs
Several factors influence the price of earthquake insurance:
- Proximity to fault lines and earthquake history
- Age and building materials of your home
- Coverage limits and deductible levels
- Local rebuilding costs
Premiums in high-risk states like California often range between $800 and $2,000 annually, but they can be much lower in other areas.
Choosing the Right Earthquake Insurance Policy
To select the best policy:
- Review your coverage limits to ensure they match rebuilding costs
- Consider deductible amounts carefully to balance premium costs and out-of-pocket expenses
- Confirm if temporary housing expenses are covered
- Explore state programs like the California Earthquake Authority (CEA) for specialized plans
Conclusion
Being informed about earthquake insurance basics is vital if you want to protect your home from seismic damage. Earthquakes can happen unexpectedly, but with the right coverage, you can recover financially without devastating loss.