Understanding Earthquake Insurance
Why Isn’t Earthquake Damage Usually Included in Homeowners Insurance?
Standard homeowners policies commonly exclude earth movement because earthquake losses can affect many homes in the same geographic area at the same time.
Earth Movement Exclusions
Homeowners policies often contain exclusions for earthquake, land shock, earth sinking, rising, shifting, or other forms of earth movement.
Separate Earthquake Coverage
Earthquake protection may be purchased through a separate policy or endorsement, depending on the insurance company and state.
Different Deductibles
Earthquake deductibles are often structured differently from standard homeowners deductibles and may be calculated as a percentage of an insured value.
Earthquake Coverage Can Protect More Than the Structure
Depending on the policy, earthquake insurance may include several types of protection for the home and household after a qualifying earthquake loss.
Coverage may help repair or rebuild qualifying damage to the home’s insured structure after an earthquake, subject to the deductible and policy limits.
Some earthquake policies may provide coverage for qualifying damage to furniture, electronics, appliances, clothing, and other personal belongings.
If the home becomes uninhabitable after a covered earthquake loss, qualifying additional living expenses may be included depending on the policy.
Coverage for foundations, masonry, chimneys, detached structures, landscaping, pools, and other property may be limited or treated differently depending on the policy.
What Should a Homeowner Consider Before Choosing Earthquake Coverage?
Compare the potential cost of earthquake damage with the policy’s deductible, limits, exclusions, and available coverage options.
Review whether the insured dwelling amount reasonably reflects current construction costs and the home’s characteristics.
Understand how the deductible is calculated and what portion of a qualifying loss the homeowner may be responsible for before coverage applies.
Review available limits for belongings and temporary living expenses if earthquake damage makes the home unsafe or uninhabitable.
Review how the policy treats foundations, masonry, landscaping, pools, detached structures, land, flood, fire following earthquake, and other potential exposures.
Have You Reviewed Earthquake Protection for Your Home?
Best Formula Insurance can help homeowners review earthquake insurance, dwelling limits, deductibles, personal property, loss of use, homeowners coverage, and other property protection options.