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How to Prep for an Earthquake and Its Insurance Claims

Nov. 18, 2016
Homeowners Insurance, Insurance

Earthquakes can happen anywhere, anytime. Securing earthquake insurance now is key if you want to recover quickly after damage to your home or belongings.

Follow these steps so you’re not caught flat-footed if you have to make an earthquake insurance claim.

Earthquake insurance checklist

1. Make sure you have the right insurance

Standard home insurance won’t pay to rebuild your home or replace your stuff after an earthquake. You’ll need to buy supplemental earthquake insurance from your home insurer, if available, or shop for a separate policy elsewhere.

Check out NerdWallet’s guide to buying earthquake insurance for more details on where you can find stand-alone coverage.

2. Inspect your insurance policy for holes

Damage to your home’s structure and possessions may not be the only issues you face. Ask your agent or insurer about adding coverage for other consequences of earthquakes — such as needing debris removal or repairs to unattached structures, like a carport or shed.

Two issues your earthquake insurance won’t cover are sinkholes and flooding. Consider buying separate flood insurance and sinkhole insurance for these problems. Sinkhole coverage may be available as an add-on to your homeowners insurance, for an extra price.

3. Nail down the replacement cost of your home

Your insurer or agent can help you figure out how much it would cost to reconstruct your home if it were destroyed. Use this number as a reference when selecting your dwelling coverage limit. Make sure you have enough coverage to fully reimburse you in case you have to rebuild from scratch.

4. Make an inventory of your belongings

Having a detailed record of your possessions will speed up your claim and help you remember everything you lose in a quake. It can also help you pinpoint valuable items, such as jewelry, that exceed your personal property coverage limit. For these items, consider purchasing add-on insurance called a “scheduled personal property” endorsement.

Although itemizing belongings isn’t the most fun way to spend a day, this inventory app from the Insurance Information Institute can help streamline the process.

5. Ask about lowering your earthquake insurance deductibles

Earthquake insurance deductibles — the amount insurers take out of your claim checks — run rather high. Typically, insurers will subtract between 10% and 20% of your coverage limit.

For example, if you have $100,000 in dwelling coverage, your deductible for any dwelling coverage claims could be as high as $20,000. If you need repairs to the tune of, say, $40,000, your insurer would only cover half.

You may not always be able to choose your deductible, depending on your insurer. If you can choose, consider setting it on the low side. Although you’ll pay more in premiums, you’ll get more reimbursement if you have a claim.

6. Don’t forget your vehicle

Earthquake insurance won’t pay to fix damage to your car. Instead, you would file a claim through your comprehensive auto insurance. If you don’t yet have comprehensive on your car insurance policy, give it a look.

7. Organize your insurance documents

Gather your insurance documents and store them in an easy-to-access spot. If you have to evacuate because of an earthquake, bring them along for safekeeping and reference during your claim.

Preparing your home for an earthquake

In addition to fine-tuning your insurance, prepping your home can help limit your financial hit after an earthquake.

Earthquake retrofitting

Ideally, an earthquake retrofitting expert would inspect your home to determine whether major upgrades are required. This is particularly important for homes built before the 1990s, especially in seismically active areas.

Retrofitting primarily involves anchoring your home to its foundation and reinforcing support walls. The process typically costs between $3,000 and $7,000, according to the California Earthquake Authority.

If you live in California, you may be eligible for a retrofitting grant of up to $3,000.

Other home safety tips

Here are some inexpensive DIY steps that can pay off in case of an earthquake.

  • Bolt or strap down heavy items: Prevent dressers, bookshelves, mirrors and other larger pieces from moving during earthquakes to limit damage and injuries.
  • Attach latches to your cabinets: This will help keep dishes, food and other items from spilling out.
  • Use closed hooks for your pictures: Nails or open hooks likely won’t keep your artwork or family photos from falling.
  • Strap your water heater to the wall: If your water heater topples over, it could cause gas leaks, fire and water damage. A bracing kit for a water heater can be found at major hardware and home stores for less than $20.

Read FEMA’s guide to preparing for an earthquake for more home safety advice, as well as tips on emergency procedures and preparing a survival kit.

» MORE: Complete guide to buying earthquake insurance

Alex Glenn is a staff writer for NerdWallet, a personal finance website. Email: [email protected].