Most standard homeowners insurance policies don’t cover earthquake damage. This leaves property owners at risk of major financial losses. Every U.S. state could experience an earthquake, yet many homeowners lack protection against this devastating natural disaster.
The numbers tell a concerning story. California faces 90% of all U.S. earthquakes, but only 10% of its residents have earthquake coverage. The state’s San Andreas Fault makes it one of the country’s most vulnerable regions. It accounts for two-thirds of the nation’s earthquake risk. But the risk isn’t limited to California alone.
Repair costs after an earthquake can destroy finances without proper insurance coverage. Earthquake insurance comes with higher deductibles than regular home insurance. These deductibles typically range from 10% to 20% of the coverage limit. This piece will help homeowners learn about earthquake insurance coverage and ways to protect their property from earthquake damage.
What does earthquake insurance cover?
Standard homeowners policies don’t deal very well with earthquake damage. You need specific earthquake coverage to protect your property from seismic events.
Your earthquake policy comes with three main protections. The dwelling coverage takes care of your home’s structure, including foundations, walls, and garages. Personal property coverage helps you replace damaged items like furniture, electronics, and appliances. When your home needs repairs, additional living expenses (ALE) coverage pays for your temporary housing and daily needs.
Your policy can also protect detached structures on your property. This coverage usually equals 10% of your dwelling coverage limit. Emergency repairs coverage is especially valuable when you have to secure your property right after an earthquake. You won’t need to wait for claim processing.
California’s construction costs have risen to $500-$600 per square foot, so you should review your coverage limits carefully. Your earthquake policy won’t cover landscaping, pools, fences, or external masonry. On top of that, it might not fully protect fragile items like glassware or artwork, which may need special coverage.
Note that earthquake insurance has separate deductibles from your regular homeowners insurance. These typically range from 5-25% of your coverage limit.
What earthquake insurance doesn’t cover?
You need to know what earthquake insurance doesn’t cover just as much as what it does. Homeowners should learn about these policy exclusions before a disaster happens.
Your standard homeowners policy covers fire damage that follows an earthquake, not your earthquake insurance. The same goes for water damage from floods or tsunamis caused by earthquakes – that’s what flood insurance handles.
Land damage creates a major coverage gap. Your policy won’t pay to repair or stabilize land affected by landslides, sinkholes, or erosion, even though earthquakes cause these problems.
Many structures get little to no protection:
- Pools and outdoor water features
- Fences and retaining walls
- Detached structures like sheds
- Landscaping elements
- Brick, stone, or masonry veneer
Your car’s earthquake damage needs comprehensive auto insurance coverage instead.
California’s rebuilding costs now range from $500-$600 per square foot, which makes these coverage gaps really matter. You should review your earthquake policy to spot where you might need more protection.
Think about getting extra coverage for your valuable items. Standard earthquake policies usually set lower limits for replacing personal property compared to dwelling coverage.
How much does earthquake insurance cost?
Your earthquake insurance costs depend on many factors. Your property’s location is the most important factor—living near fault lines means you’ll pay more because of the higher risk.
The average American pays $800 yearly for earthquake insurance. California homeowners might pay more. These higher rates are caused because California faces two-thirds of the nation’s earthquake risk.
Your home’s features affect the costs heavily. Older buildings are charged more. Wood-frame houses cost less to insure than brick buildings because wood handles earthquake stress better. The type of soil, foundation materials, and how well your house was built also determine your premium rates.
Earthquake insurance deductibles work differently from regular home insurance. The deductible ranges from 5% to 25% of your coverage limit. It is calculated as a percentage instead of a fixed amount. Let’s say you have $300,000 dwelling coverage with a 10% deductible – you’ll need to pay $30,000 before your insurance kicks in.
Rebuilding costs now range between $500-$600 per square foot. You should review your coverage often. A higher deductible lowers your premium but means more out-of-pocket expenses after an earthquake. The right balance between protection and cost depends on your specific needs. Contact our Agents to help you figure out best protection for you.
