Earthquake Insurance: Is This Excluded Peril Necessary for Your Home?

Similar to flooding (Article 13), damage caused by earth movement, including earthquakes, is almost universally excluded from standard **home insurance** policies. For homeowners living in seismically active regions, purchasing separate **Earthquake Insurance** is the only way to cover the potentially massive costs of repairing or rebuilding their home after a tremor.

What Earthquake Insurance Covers

This specialty policy is typically purchased as an endorsement to your homeowner policy or as a separate stand-alone policy. It covers the structure of your home, personal belongings, and often provides Loss of Use coverage (Additional Living Expenses) if you are displaced.

Key Considerations: High Deductibles

Earthquake policies are known for having very high deductibles. Unlike a standard homeowner deductible, which might be a fixed dollar amount ($1,000), earthquake deductibles are usually a percentage of the dwelling’s replacement cost (e.g., 10% to 25%).

If your home is insured for $500,000 and the deductible is 15%, you must pay $75,000 out-of-pocket before coverage kicks in.

Coverage vs. Risk

While the premiums are high, the risk of total loss from a major earthquake can be catastrophic. Factors that influence the cost include:

Your home’s proximity to a known fault line.
The age and construction material of your home (brick structures are often more vulnerable than wood-frame).
Whether your home has been retrofitted (e.g., bolted to the foundation) to resist shaking.

Hidden Coverage: Be aware that standard home insurance *may* cover fire damage that results from an earthquake, but it will *not* cover the initial structural damage caused by the shaking.

For those in high-risk zones, **Earthquake Insurance** is a vital, albeit expensive, peace of mind against the devastating financial consequences of seismic activity.