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Earthquake Insurance

A Guide to Earthquake Insurance Coverage

Earthquake insurance is a kind of specialized coverage that homeowners can obtain to protect them from property loss or damage due to seismic activity. Certain areas are more likely than others to have earthquake activity; therefore coverage is often not necessary or even offered in these certain regions. The cost of this coverage is calculated via the determination of the probability that an earthquake can cause major damage to a home that is being offered coverage. This kind of insurance is very different from a typical home insurance policy as it covers what is normally excluded from such standard policies.

Who Benefits

Earthquake insurance provides compensation to help in covering the costs of repair or replacement of a home (or business) and one’s personal items that are damaged or destroyed due to seismic activity. (It will not protect one from losses attributed to other events, like fire, floods, or wind storms.) This kind of insurance will likely have an unusually large deductible amount that will vary depending on the level of coverage purchased and, importantly, the location of policyholder’s property.
Those who live in areas that are at high risk for quakes can purchase this insurance from most regional insurance providers. The usual policy will provide protection for structural damage as well as personal property items. Payouts for personal property losses are set at a specific dollar amount and this is due to the fact that personal items, like furniture, will often make it through a quake intact as opposed to a fire or flood in which everything will be mostly affected. This assists in keeping costs down for both the policyholder and the insurance company. Such things as a big screen TV are far more likely to sustain damage in a quake, so insurance companies often appraise the values of the more fragile personal belongings and then will set a fixed dollar amount for such covered items.

How it Works

Like all insurance, this coverage comes with a deductible. Deductibles will often range from 5 to 15 percent of the total amount. Opting for a higher deductible will often result in significantly lower premium payments. Once a claim is made for damages, the deductible is then taken from the amount of the insurance company’s payout. If damages should exceed the deductible, then the policyholder is provided the balance to pay for repair or replacement for his or her property.

The Types of Coverage Available

Good earthquake insurance has three major components of coverage: Home, personal property and living expenses assistance.

Home Coverage

If a home is damaged, these policies will cover repairs for such things as wall cracks, ceiling damage, issues with foundation and more. Note that this protection will not likely extend to landscaping, fences, pools, walls, or separate structures outside the structure of the home.

Personal Property Coverage

This component of the policy is what pays out to repair or replace appliances, furniture, electronics and so on. Delicate items, such as antiques and other collectibles, can be covered with the purchase of supplemental policy coverage. This coverage normally starts at $5000 and can be extended up to $200,000.

Living Expense Coverage

This provides financial help for the temporary expense of living away from home while repair work is being undertaken. Coverage payouts can be provided anywhere from $1,500 to $100,000. These funds can be used to cover the rental of a temporary place to live, for food, to cover moving and storage costs, even laundry and furniture rental.


If an earthquake happens, having this kind of coverage can make the difference between recovery and outright homelessness. This is the coverage that can help you to rebuild your home and keep you financially solvent as well.