Earthquake Insurance: What You Need to Know
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A standard homeowners, renters or condo insurance policy generally won’t cover earthquake damage.
Earthquake insurance may be available as a standalone policy or as an add-on to your existing coverage.
Insurance for earthquakes often comes with high deductibles that could considerably reduce your claim payout.
An earthquake can shake even the sturdiest of foundations, damaging your walls and destroying your personal belongings. And if you don’t have insurance, it could also leave financial destruction in its wake.
Unfortunately, a standard homeowners, renters or condo insurance policy likely won’t cover this damage. So if you live in an area that’s at risk, you may want to consider buying earthquake insurance.
Do you need earthquake insurance?
Earthquake insurance isn’t mandatory. Although quakes can happen in all 50 states, some places are more prone to them, and in those cases earthquake insurance becomes a more important purchase.
The two states with the most frequent earthquakes are California and Alaska, according to the U.S. Geological Survey, with California’s quakes causing the most damage. A USGS report from 2014 found that there was a greater than 99% chance that an earthquake of magnitude 6.7 or higher would hit the Greater California region within 30 years. (The state registered a magnitude 6.4 earthquake in December 2022.)
Although Western states are best known for their earthquake risk, quakes are also a threat in places like St. Louis and Memphis, which are near the New Madrid Fault Line in southeastern Missouri. Hydraulic fracturing, or fracking, may also contribute to earthquakes in places like Oklahoma.
You can check your state’s earthquake risk on the USGS website.
Keep in mind that certain types of houses may be more likely to suffer earthquake damage than others. Brick homes, wood frame houses with crawl spaces, and homes with multiple stories are at greater risk, according to the Missouri Department of Commerce and Insurance.
Some people decide not to buy insurance because they assume federal assistance will be available if the worst happens. However, federal assistance may not be as helpful as you’d expect.
Individual grants from the Federal Emergency Management Administration will likely fall well short of what you need to recover financially. And while low-interest loans from the U.S. Small Business Administration can offer up to $200,000 toward the cost of rebuilding your home, you’ll need to pay that money back.
What does earthquake insurance cover?
The exact details may vary from policy to policy, but earthquake insurance generally includes the following key types of coverage:
Repairs to your house and attached structures, such as a garage. (Note that earthquake insurance for renters and condo owners doesn’t include this coverage, as the landlord or condo association is responsible for insuring the building.)
Damaged belongings, such as furniture and clothes. You may need to add breakables coverage to pay for damage to fragile items such as glassware or crystal.
Additional living expenses, such as hotel and restaurant bills if you can’t live in your home during repairs.
The following types of coverage may also be included or available as add-ons:
Detached structures, such as a carport or toolshed.
Emergency repairs to protect your home from further damage.
Building code upgrades to bring your home up to the latest safety standards.
Land restoration to stabilize the property underneath your home.
Exterior masonry veneer for certain types of decorative facings on your home.
Loss assessment for condo unit owners, in case your association asks you to contribute to repair costs for shared spaces.
What’s not covered
An earthquake policy usually won’t cover:
Fires caused by an earthquake. Your homeowners, renters or condo policy should cover that.
Vehicle damage. If your auto insurance policy includes comprehensive insurance, it will cover earthquake damage to your car up to your policy limits, minus your deductible.
Floods. You’ll need separate flood insurance for this damage, even if the flood is a byproduct of an earthquake.
Sinkholes. You may be able to add this coverage to your homeowners policy.
Masonry, such as the brick, stone or rock used for your home’s veneer. (As noted above, you may be able to buy extra coverage for this.)
Preexisting damage. Earthquake insurance won’t fix anything that was already damaged before you bought the policy.
How to get earthquake insurance
If you’re in the market for earthquake insurance, start with your current homeowners or renters insurance company. Ask whether it offers either an add-on to your policy or a stand-alone earthquake policy.
In California, the law requires home insurance companies to sell earthquake coverage. California Earthquake Authority, or CEA, is the state’s primary earthquake insurance provider. It works with dozens of companies to offer policies for homeowners, renters, condo unit owners and those who own manufactured homes.
In California, Oregon and Washington, residents can buy standalone earthquake policies from GeoVera or Arrowhead; the latter is an agency selling policies from multiple companies.
If you live elsewhere and your current insurer doesn’t offer coverage, you’ll need to shop around. Consider reaching out to a local independent insurance agent who works with multiple companies. Your state’s Department of Insurance website can also be a resource for finding licensed earthquake insurers in your area.
If an earthquake has just occurred in your area, insurers typically won’t sell new policies for one or two months.
How much earthquake coverage do you need?
If you’re a homeowner, your insurer usually sets the same limits on dwelling coverage for both earthquake and home insurance. This reflects the estimated cost to rebuild your home — not its market value. If you’re a renter, you don’t need to worry about adding dwelling coverage.
Your personal property coverage limit may initially be set on the low side, around $5,000, but you can raise this amount to your insurer’s maximum. However, there may be caps on how much your insurer will pay for certain items, such as computers. A home inventory can help you determine how much your belongings are worth.
When choosing a coverage amount for additional living expenses, consider how much it might cost for you to spend weeks or months living elsewhere if it took a while to repair your home. Learn more about loss of use coverage.
Earthquake insurance deductibles
Earthquake policies generally have a steep deductible, which is the amount subtracted from your claim payment. While you might have a flat-rate deductible such as $500 or $1,000 on your homeowners policy, earthquake deductibles tend to be a percentage of your coverage limits. These percentages may range from 2.5% to 25%, depending on your insurer.
Another difference is that while home insurance often has one deductible that applies to your home’s structures and your possessions, some earthquake insurance companies use separate deductibles for each part of the policy: dwelling and personal property. (There’s typically no deductible for temporary living expenses.)
Choosing higher deductibles can save you money on your premiums, but it could leave you with a hefty amount to cover yourself after an earthquake. Here’s an example:
You’ve insured the structure of your home for $300,000 and your possessions for $150,000, each with a 20% deductible. If a severe earthquake leveled the house and destroyed your belongings, your insurer would deduct $60,000 — 20% of your dwelling coverage limit — from the claim payout for rebuilding your home.
The same goes for your possessions. The insurer would subtract $30,000, or 20% of your $150,000 personal property limit.
Between the two deductibles, you could end up responsible for $90,000 of repairs that insurance wouldn’t cover. And in the case of minor damage, you might not get a claim payout at all if the total cost of repairs was less than your deductible.
That’s why it’s important to carefully weigh the cost of your premiums against the amount you could afford to pay if a major earthquake damaged your home.
Aftershocks are common after an earthquake. In general, as long as they take place within 72 hours of the initial quake, you can file a single claim for all related damage — and, crucially, pay just one set of deductibles.
How much does earthquake insurance cost?
Rates for earthquake insurance will depend on factors such as:
The age of your home.
The number of stories in your house.
Your home's rebuilding cost.
The deductibles and coverage limits you choose.
The soil type on your property.
The building materials used in your home.
Your home’s proximity to fault lines and seismic activity.
If you live in California, you can estimate the cost of earthquake insurance for your home on CEA’s website.
How can you save money on earthquake insurance?
You may be able to reduce your earthquake insurance premium by choosing a higher deductible or retrofitting your home to reduce its risk of damage. The average cost of retrofitting a home for earthquake safety is between $3,000 and $7,000, according to CEA. This could include:
Bolting your house to its foundation.
Attaching the water heater to a wall.
Adding automatic gas shut-off valves.
Bolstering the walls around your crawl space.
Reinforcing your chimney and masonry walls.