Earthquake Insurance

A recent assessment by the United States Geological Survey found that over half of all Americans live in areas vulnerable to earthquake damage. According to the analysis, 143 million Americans reside and work in regions that could experience shaking that could cause structural damage. 28 million people live in locations where there is a high likelihood of destructive shaking, while 57 million live in areas where there is a moderate likelihood of shaking.

Most home, condo, and renter's insurance policies won't cover earthquake damage. You can buy an earthquake insurance policy if you want covering for issues caused by earthquakes.

But make sure you carefully read the policy before you purchase it. There are frequently numerous exclusions and limits on coverage, which ought to make you think twice.

How Does Earthquake Insurance Work?

Your home and possessions are covered by earthquake insurance in the event that they are damaged or destroyed during an earthquake.

Since earthquakes are not covered by hazard insurance, they are not covered by a typical homeowner's insurance or renters' insurance policy. If you don't have earthquake insurance, you'll have to foot the bill for repairs if your house is damaged during an earthquake.

One exception is if a fire starts because of an earthquake and burns your house down. In that situation, the damage caused by the fire should be covered by your house insurance policy since it includes coverage for fires. In most cases, it also includes coverage for additional living costs, which will pay for temporary housing while your home is being restored.

According to a poll conducted by the Insurance Information Institute in July 2020, 23% of homeowners with home insurance also have earthquake insurance. Only two years ago, it was 15%, therefore there was a rise. Unsurprisingly, the majority of homeowners with earthquake insurance reside in the West.

Is earthquake insurance necessary?

Insurance against earthquakes is not required. Although earthquakes can occur everywhere in the United States, some regions are more vulnerable to them than others, making earthquake insurance a more critical investment.

What is covered by earthquake insurance?

Although specifics may vary from policy to policy, the following primary forms of coverage are typically included in earthquake insurance:

repairs to your home and any affixed buildings, like a garage. (Note that since the landlord or condo association is responsible for insuring the building, earthquake insurance for renters and condo owners does not include this coverage.) damaged possessions, including clothing and furniture. To cover damage to breakable things like crystal or glassware, you might need to add breakables coverage.

Additional living costs, such as lodging and dining expenses if you are unable to reside in your house while it is being repaired.

Additionally, the following coverage options could be offered as add-ons or included: detached buildings, such a toolshed or a carport. removing debris. Urgent repairs to keep your house from suffering additional harm. Upgrades to building codes can bring your home up to date with safety requirements. Land stabilization to protect the area under your house.

For some sorts of decorative facings on your property, use exterior masonry veneer. Condo unit owners may be required to pay a loss assessment if their association wants them to contribute to the expense of fixing up communal areas.

What's left out?

Typically, an earthquake insurance policy excludes: a result of an earthquake, fires. That should be covered by your homeowners, renters, or condo policy.

Vehicle injury. If the comprehensive insurance provision of your auto insurance policy is in effect, it will pay for earthquake damage to your vehicle up to the policy limits, less your deductible.

Floods. Even if the flood is a result of an earthquake, you'll still need separate flood insurance to cover this damage.

Sinkholes. This coverage could be an addition to your homeowner's insurance.

Masonry, including the brick, stone, or rock utilized for the exterior of your home. (As previously said, you might be able to get additional coverage for this.

A pre-existing injury. Anything that was damaged prior to purchasing the coverage will not be repaired by earthquake insurance.

How to obtain earthquake coverage

Start with your current homeowners or renters' insurance provider if you're looking for earthquake insurance. A stand-alone earthquake coverage or an add-on to your existing policy? Find out.

Home insurance providers in California are required by law to offer earthquake coverage. The main supplier of earthquake insurance in the state is the California Earthquake Authority, or CEA. It collaborates with dozens of businesses to provide insurance for manufactured homeowners, renters, condo unit owners, and homeowners.

Residents of California, Oregon, and Washington can purchase independent earthquake policies through GeoVera or Arrowhead, the latter of which is a company that sells policies from many providers.

You'll need to look elsewhere if you don't currently live in that area and your present insurer doesn't provide coverage. Consider getting in touch with a neighborhood independent insurance agent that represents many different firms.

Finding authorized earthquake insurers in your area can also be done using the Department of Insurance webpage for your state.

According to the U.S. Geological Survey, California and Alaska are the states with the most earthquakes, with California's quakes causing the greatest damage. According to a USGS assessment from 2014, the likelihood of an earthquake of magnitude 6.7 or higher striking the Greater California region within 30 years was greater than 99%.

The New Madrid Fault Line in southeast Missouri is close to cities like St. Louis and Memphis, which are at danger for earthquakes even though the Western states are well known for their high earthquake risk. Fracking, also known as hydraulic fracturing, may be a factor in earthquakes in states like Oklahoma.

The USGS website allows you to examine the earthquake risk in your state. Remember that some home styles may be more vulnerable to earthquake damage than others. According to the Missouri Department of Commerce and Insurance, residences with numerous stories, wood frame structures with crawl spaces, and brick homes are more vulnerable.

Some people opt not to purchase insurance because they believe that if the worst occurs, federal assistance will be accessible. However, you shouldn't always anticipate government support to be as beneficial.

The Federal Emergency Management Administration's individual grants will probably fall well short of what you need to recover financially. Even while the U.S. Small Business Administration can provide low-interest loans up to $200,000 to help with the expense of rebuilding your house, you will still be responsible for paying those loans back.

Insurance tips for earthquakes

Even if you do not reside close to a fault line, it is crucial to determine whether you require earthquake insurance. In addition to having an effect well beyond major fault lines, several regions of the nation—most notably, parts of Oklahoma are going through an increase in seismic activity as a result of oil drilling activities. If you're considering purchasing a home in an earthquake-prone area, it's a good idea to research insurance coverage costs to determine the exact cost of the property.

Inquire the following to see if you require earthquake insurance:

If your home is damaged, could you afford the cost of rebuilding or repairs?

If your personal belongings are harmed or destroyed, can you replace them?

If structural damage renders your home uninhabitable, can you afford to pay for temporary accommodation as well as other costs?

The cost of earthquake insurance can vary greatly, from being quite cheap in low-risk locations to being relatively expensive in areas that are more vulnerable to earthquakes. Deductibles for earthquake insurance policies often range from 5 to 15% of the policy amount, which is greater than those in regular homeowners or renters' insurance.

The non-profit California Earthquake Authority (CEA) provides coverage for home structure, improvements to building codes, and emergency repairs due to the high risk of earthquake damage in California. Additionally, it offers distinct coverage choices for additional living expenditures and goods (each with a different, lower deductible) (with no deductible).