An earthquake can have a devastating impact on houses and other structures. If your area gets rocked by an earthquake and you assume that your homeowners insurance policy will cover your losses, you might be in for an unwelcome surprise.
Standard Homeowners Insurance Doesn’t Cover Earthquake Damage
A standard homeowners insurance policy won’t cover damage caused by an earthquake. That doesn’t necessarily mean that you’ll be out of luck if an earthquake damages your house. It does mean that you’ll have to look for another way to get coverage.
Your homeowners insurance company might offer options that can give you financial protection from earthquake damage in exchange for an additional premium. You might be able to add an earthquake endorsement or rider to your existing homeowners policy, or you might be able to buy a separate earthquake insurance policy.
If your homeowners insurance company doesn’t offer earthquake coverage, you can look for a policy through a different insurer. Your homeowners insurance company might be able to recommend an insurer that offers earthquake coverage, or you might be able to get a recommendation from your state’s department of insurance.
What Earthquake Insurance Does and Doesn’t Cover
If you take out an earthquake insurance policy, rider, or endorsement, it will pay to repair your house if it gets damaged or cover the cost to rebuild it if it gets destroyed.
Earthquake coverage will also cover additional living expenses that you incur while your home is being repaired or rebuilt and pay to replace personal belongings that get damaged or destroyed.
An earthquake insurance policy, rider, or endorsement will have different levels of coverage for various types of losses. Your deductible for each category might be a specific dollar amount or a percentage of your total amount of coverage.
An earthquake insurance policy, rider, or endorsement will cover damage that can be directly attributed to an earthquake. If an earthquake causes another problem, such as a fire or flooding, earthquake insurance won’t cover damage to your house or belongings that’s attributed to that other event.
Your losses might still be covered, just by another insurance policy. For instance, your homeowners insurance can cover fire damage, and flood insurance (if you have it) can cover flood damage.
Figure Out If Earthquake Insurance Is Worth the Money
The cost of earthquake coverage can vary widely. Your premiums will depend on multiple factors, including your location, the risk of an earthquake in that area, the age of your home, the way it was built and how likely it would be to sustain damage in an earthquake.
If you’re thinking about buying a house in an area that’s near a fault line, consider the odds that an earthquake would occur and whether you could afford to repair or rebuild your house and replace your belongings. Get quotes for earthquake coverage from several insurers and figure out if purchasing that coverage would make financial sense for you.
