Earthquakes and Homeowners Insurance

Mar 26, 2019 | Information, Solutions

Earthquakes are a fact of life in California. Recently, it was the 25th anniversary of the Northridge earthquake which was one of the costliest natural disasters in U.S. history.  It also served as a wakeup call for the state of California, as shortly thereafter insurers that sell residential policies (like us) were required to also offer earthquake insurance.

You may be asking “Why do I need special earthquake insurance? Doesn’t my homeowners’ policy cover damage by an earthquake?” The answer is… probably not.

most homeowners insurance policies do not cover earthquakes

Most homeowners’ insurance policies do not cover earthquakes. Many people come to this realization when it is too late, and they are trying to file a claim that cannot be covered. So, if you live in an earthquake zone you should consider buying an earthquake policy. And if you’re thinking earthquakes only occur in California… think again.

California definitely tops the list of earthquake danger zones, but it’s not the only area of risk. The entire West Coast of the United States sits atop a subduction zone, where the giant Pacific tectonic plate dives under several North American plates. This creates a lot of stress in the complex series of faults and fractures and makes this entire area prone to earthquakes.

And let’s not forget Washington D.C. Our nation’s capital suffered an earthquake several years ago that severely damaged the Washington Monument and forced its closure for several years while it was repaired. Another fault to be aware of in the Midwest is the Madrid fault that is along the Mississippi River.

6 reasons you should consider earthquake insurance

1Your current homeowners or renters insurance policy does not cover everything. Structural damages and broken personal property resulting from an earthquake are most likely not covered by your homeowners or renter policies. You’ll need to purchase additional coverage to protect it from earthquakes.

Earthquake insurance may not be as expensive as you think. There are a number of different factors that influence the price and you should consult with one of our agents to learn more about the many available options.

3It’s easy to get. You don’t have to jump through a bunch of hoops to buy earthquake insurance. With the help of one of our agents, it’s quite simple. If you already have homeowners insurance with us, we can provide you a quote and get you signed up right away.

4Federal and state governments can only help so much. If the President officially declares a disaster, FEMA will help in an evacuation or recovery effort. This may also provide access to disaster aid funds, however, there are no guarantees that you’ll be eligible and this money is often difficult to get.

5Your home might be on or near a fault line. Sometimes, however, faults are completely unknown. This was the case with the Northridge earthquake, as this 6.7 temblor occurred on an undocumented fault. One thing is certain … there will be more earthquakes in the future. California has it all … great weather, lots to do, and earthquakes. In fact, there is a 99 percent chance that within the next 30 years there will be a 6.7 or greater earthquake, according to the California Earthquake Authority. But California isn’t alone, because earthquakes have occurred in just about every state, including Oklahoma, Kansas, Illinois, Nevada, and Texas.

6If you are displaced by an earthquake, having an earthquake policy in force can help you pay for living expenses. If your home is greatly impacted, you will not be able to live there during the construction and re-building. The insurance will assist you by allowing you a budget to rent a hotel room, or another dwelling to reside in temporarily.

how much earthquake insurance do i need?

So you may ask yourself: How much earthquake coverage do I need? As a starting point, think about what it would cost to rebuild your home after an earthquake. You can work with your agent to determine specific coverage limits for your home, personal property, and living expenses if you can’t live in your home after an earthquake. You and the agent can also work together to determine a deductible that makes you most comfortable.

Want to learn more? Check out our Earthquake Safety Tips to help prepare for the next big one.

Deductibles as low as 2.5%

An earthquake insurance policy on your home can greatly reduce the financial impact of a devastating earthquake. Contact your agent for a complimentary no-obligation quote.