Earthquake insurance
Earthquake insurance is a form of property insurance that pays the policyholder in the event of an earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage.
Most earthquake insurance policies feature a high deductible, which makes this type of insurance useful if your house is destroyed. Rates depend on location and the probability of an earthquake loss. Rates may be lower for houses made of wood, which withstand earthquakes better than homes made of brick.
How much coverage do you need?
Compared to home insurance, earthquake policies contain a steep deductible, which is the amount subtracted from your claim payment. Insurers will deduct between 10% and 20% of your dwelling coverage limit.
- Repairs to your house and attached structures, such as a garage.
- Your personal belongings, such as furniture and clothes.
- Additional living expenses, such as hotel bills if you can’t live in your home.
Earthquake insurance isn’t mandatory. Although quakes can happen in all 50 states, some places are more prone to them like Washington, Oregon and Idaho, and in those cases earthquake insurance becomes a more important purchase.