Earthquake Insurance
Plain English
Earthquake insurance covers shaking damage that homeowners and renters policies leave out. It's bought separately or as an add-on, and its deductible is usually a percentage of the coverage limit, about 2% to 20% depending on where you live, so you'd pay a large share of smaller losses. Fire after an earthquake is generally covered by the regular homeowners policy.
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On this page
Definition
Earthquake insurance is coverage, sold as a separate policy or an endorsement, for damage caused by earthquakes, which standard homeowners and renters policies don't cover. It typically has a percentage deductible, much higher than a typical homeowners deductible: the Insurance Information Institute puts it at 5% to 15% of the policy limit, and the NAIC at 2% to 20% of the insured value, depending on location.
Why It Matters
In earthquake-prone areas, a damaging quake can cost more than most people could pay out of pocket. Understanding the percentage deductible matters as much as the decision to buy.
Real-World Example
Imagine a home with $400,000 of earthquake coverage and a 10% deductible, so $40,000. A quake causes $60,000 of structural damage. The earthquake policy would generally pay about $20,000. The homeowners policy wouldn't pay for the shaking damage, but if the quake had caused a fire, the homeowners policy would generally cover the fire damage.
Common Misconceptions
- Assuming homeowners insurance covers earthquake damage.
- Overlooking how large a percentage deductible is in dollars.
- Assuming earthquake coverage includes belongings automatically; it can be separate.
Key Takeaways
- The Insurance Information Institute: "Homeowners and renters insurance does not cover earthquake damage."
- The NAIC: earthquake insurance "generally includes a percentage deductible, ranging from 2% to 20% of the total insured property value."
- "Deductibles for earthquake insurance plans are higher than those in standard homeowners or renters insurance, usually from 5 to 15 percent of the policy limit."
- Fire damage caused by an earthquake is generally covered by the homeowners policy, per the Institute.
- In California, the California Earthquake Authority sells policies through participating insurers.
Frequently Asked Questions
Is fire after an earthquake covered?
Generally yes, by the homeowners policy.
What's it commonly confused with?
Flood insurance, a separate policy for flooding, which also isn't covered by homeowners insurance.
Related Terms
Related Coverages
- Homeowners Insurance
Related Scenarios
Explore the rest of the Homeowners Insurance category.
Browse Homeowners Insurance terms →Sources
The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- iii.orgEarthquake insurance for homeowners · Insurance Information Institute (Triple-I)
- content.naic.orgEarthquake insurance · National Association of Insurance Commissioners (NAIC)
Educational information, not advice: This page is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers.