Homeowners Insurance and Earthquakes: What You Need to Know

Earthquakes and home insurance

Most standard homeowners policies exclude earthquake damage. Suppose you reside in a particularly earthquake-prone region. In that case, however, your homeowner's insurance company may offer earthquake coverage as either a stand-alone policy or an endorsement you can add to your existing policy for a fee.

Earthquakes or seismic activity can result in expensive repairs or even total destruction of your home. However, many homeowners choose not to purchase earthquake insurance because policies can be quite expensive.

What is earthquake Insurance?

If an Earthquake damages your home, you will be compensated by earthquake insurance. This coverage is in addition to the one you already have, whether you own your home or rent.

Without earthquake insurance, you may have to pay for the cost of fixing up your home if it is damaged by an earthquake. The seller may inform you in a Natural Hazard Report that the property you're looking at is in an area prone to earthquakes. Most standard home insurance policies won't pay for repairs caused by an earthquake.

What does earthquake insurance cover?

What your earthquake policy covers precisely will vary from one policy to the next.

However, generally, most policies will have three parts:

• Dwelling coverage: The coverage covers the cost of home repairs or replacement.
• Personal property coverage: Your personal belongings, like your couch or TV, are protected by personal property insurance.
• Loss-of-use coverage: Paying for your temporary, supplementary living expenses when you have to live somewhere else while your home is being repaired is what loss-of-use coverage is all about. If you need to rebuild your new home at a higher cost because the original structure isn't compliant with the current building codes, your insurance may have (or offer as an optional rider) a building code upgrade coverage to help pay for those additional expenses.

Which states offer earthquake insurance?

Earthquake insurance is usually available in most states. Getting earthquake insurance for your home may be a good idea if you live in an earthquake-prone area, especially if you're a resident of Alaska, California, Oklahoma, Idaho, Missouri, Illinois, Kentucky, Hawaii, Montana, Oregon, Nevada, South Carolina, Utah, Washington, Tennessee or Wyoming.

Is all earthquake damage covered?

As earthquake damage can lead to a wide range of complications later on, it's natural to wonder: which of my insurance policies will cover the costs after a quake has occurred?

Suppose, for the sake of argument, that your house suffers significant water damage as a result of a burst pipe caused by an earthquake. If there's an earthquake, will your policy pay for that? Your home insurance policy is probably going to foot the bill here for the necessary repairs.

However, your flood insurance would kick in if water from outside your home made its way inside because of the earthquake. Normal home insurance would likely kick in again if an earthquake caused a fire in your home. Complete auto insurance would cover the cost of fixing your car if it was damaged by an earthquake.

It's important to remember that earthquake insurance isn't a panacea for financial ruin. You should still get the coverage you need even if repairs or replacement of your property are covered by another insurance policy.

Usually, policies work side-by-side with one another and keep you insured from unexpected financial expenses. Fires caused by an earthquake, vehicle damage, floods, sinkholes, pre-existing damage, etc., are some of the damages that are not directly covered by earthquake insurance.

How much does earthquake insurance cost?

In the United States, the usual cost of earthquake insurance with a 5% deductible is $1,306, while the typical cost of earthquake insurance without a deductible is $1,211. There are a couple of factors that affect how much you'll pay for earthquake coverage.

Please note that the rates below are for policies with a $200,000 dwelling limit and a 5% earthquake deductible

What is an earthquake deductible for home insurance, and how does it work?

The deductible on your earthquake insurance policy is likely to be quite high. In most home insurance policies, the deductible is a set dollar amount. While your homeowner's policy deductible might be a set amount like $500 or $1,000, earthquake deductibles are more commonly a percentage of your coverage limits. They could be anywhere from 2.5% to 25%, depending on your insurance company.

The deductible on earthquake insurance, however, is calculated as a percentage rather than a flat dollar amount. Your premium will be relative to the policy's coverage limits, which are based on the cost of replacing your home.

You can reduce your monthly premium payments by increasing your deductible, but you may have to pay out of pocket for earthquake damage repairs. Insurance premiums should be considered in light of the amount you would be able to pay to repair your home in the event of a major earthquake.

How are earthquake insurance rates determined?

Insurers use a set of criteria to set their prices for earthquake coverage. One such consideration is the maximum amount of insurance coverage you have for your house. Your limit should be equal to the cost of rebuilding your house to its pre-disaster condition.

Factors that determine the earthquake insurance rates:

• ZIP code: If your home is in close proximity to high-risk earthquake zones, you can expect higher rates. Rates will be higher if your house is in close proximity to an area prone to earthquakes.
• Building materials used in your home: Some materials are more durable than others. For instance, because brick is more fireproof and durable than wood, homeowners with brick homes typically pay less for home insurance.
• Age of your home: Older homes are less likely to have been built with earthquake-resistant materials.
• Foundation type: Your home's earthquake resistance may vary depending on the type of foundation you have.

Do rates increase after an earthquake claim?

After a claim is filed because of an earthquake, insurance premiums increase by about eight percent. Rate increases may be even more severe in the event of severe damage or catastrophic earthquake losses.

Home Insurance Premium for Brands after Claim

According to our research, Nationwide might be the most affordable option for homeowners after an earthquake loss

Do I need earthquake insurance?

The location of your home is a major factor in determining whether or not you should purchase earthquake coverage. You probably don't need me to tell you how important earthquake insurance is if you live on the west coast or in Oklahoma, two places notorious for their seismic activity.

Although people in states like South Carolina and Missouri are still at risk, they may be less prepared for natural disasters than those in other states. Consequently, it is something to give some thought to if you live in a state prone to earthquakes.

Is earthquake insurance worth it?

Despite the fact that having earthquake coverage is not mandatory, if your home is destroyed by an earthquake, earthquake insurance can help you avoid financial ruin even if you don't live near a fault line. After an earthquake, it can be used to help pay for the price of repairs or a complete rebuild.

Some people may be put off by the price of earthquake insurance, especially when taking into account the need to buy a separate policy in many regions. Finding a more reasonably priced foundation policy could make a significant dent in the overall expense. One effective strategy is to routinely compare prices for standard homeowners insurance.

How can I protect my home from earthquakes?

You can protect things inside the house by:

• Fixing shelves and cabinets to the wall.
• Latching all drawers and cupboard doors to prevent items from falling out.
• Securing large, heavy, and breakable items directly to shelves; installing ledge barriers on shelves; storing heavy items low.
• Fastening gadgets like computers and microwaves to the surface of a desk, table, or countertop.
• Attaching everything that can fall from the ceiling, including lights, suspended ceilings, chandeliers, and houseplants, to the house's framing.
• Protect your home's glass surfaces by installing a film of some sort.
• Fixing heavy gadgets to the wall with straps or cables for safety. Put locks on the wheels of any heavy furniture or appliances.

The house itself can be protected by reinforcing the structural elements of the house.

Earthquakes Cause Serious Damage. Protect Yourself. - Way.com Summary

As standard home insurance policies don't cover Earthquake insurance, it is always safe to buy extra coverage. Do you want to get this coverage for affordable rates?

Then Way.com can help you! Use our app or visit our website to find the best Earthquake insurance in your area. Of course, the rate can differ based on your place and your chosen coverage limit. But we can offer you the most affordable rates for earthquake insurance.

Do you want additional information or help? Then our agents in your area can help you. Get in touch if you want to know more about the best Earthquake insurance coverage!