What is Earthquake Insurance and How Does It Work?


Several weather conditions could end up damaging the structure of your home. However, an earthquake might destroy your whole property. This means you will lose your most important asset. Many experts could argue that the chances of this happening are actually slim. But that will depend on where you live. That’s why to protect your house, we will advise you to purchase earthquake insurance.

We know that most of you might be wondering, isn’t it enough to have homeowner’s insurance? The answer is no. Even when this policy covers several damages to your property, an earthquake is not included. If you are renting, your tenant insurance will also have limits in this regard. That’s why apart from getting the best coverage in the market with providers such as Surex, you should also consider purchasing earthquake home insurance.

Keep in mind that having earthquake insurance is optional. That means in some cases, depending on the location of your property, this policy won’t be necessary. To help you determine if this is your case, below, we will tell you everything there is to know about earthquake insurance.

What is earthquake home insurance?

As its name states, this policy will protect your property in case of an earthquake. Your provider will help you pay for all necessary reparations and the replacement of your belongings. In some cases, you won’t be able to live at home after the catastrophic event. If that happens, you don’t need to worry because you will have coverage for any additional living expenses.

Several companies offer earthquake insurance as an add-on to your policy. Since you will have additional coverage, your fees will also increase. In case your provider doesn’t give you this possibility, other organizations specialize in this type of insurance.

Earthquake Insurance: What does it cover?

The reason why many people consider getting earthquake home insurance is that they consider the worst-case scenario. For instance, let’s say you live in California, an area in the United States that is very prone to earthquakes. If this event happens, and your house is destroyed, you will be responsible for paying all repairs and replacing personal property.

However, if you have coverage, you won’t be drowning in debt trying to reconstruct your home. It is true, you will have to pay a little bit more each month, but in the end, it will be worth it.

Since there are several types of coverage, you can get under earthquake home insurance. In this section, we will explain one by one.

1. Dwelling Coverage

This is the part of the policy that will cover any repairs to your home structure after the earthquake. Here you can include any attachments, such as a garage or porch. Remember that landscaping and pools are not part of this insurance.

2. Personal Property

Imagine that an earthquake destroyed your room. In this case, if there is any damage to the walls and structure, that will be covered under the dwelling part of the policy. But things such as your TV, computer, electronics, sports equipment and furniture will also be included in the insurance as personal property.

3. Additional Living Expenses

If the earthquake completely destroys your property, you won’t be able to live in your home while it gets repaired. But with earthquake home insurance, you will get enough money to pay for a hotel and meals.

4. Upgrades

It can happen that in your region, there are construction costs that mandate that any new home should have certain upgrades. In your policy, this will also be included, as well as any additional expenses you encounter in the process.

5. Emergency repairs

In case something needs to be fixed right away to prevent any further damage to the structure of your home.

What is not included in earthquake insurance?

It is important to clarify that this policy only covers damages caused by an earthquake, or a volcanic eruption that was a result of the same natural disaster. But, other events such as floods or fires are not included. The good news is that you can get add-ons for these situations.

Further, some items are not covered in this insurance policy, such as jewelry, pools, fences and vehicles.

How does earthquake insurance work?

First, after the disaster, you will have to file a claim. In this document, we recommend you include all the evidence, such as photographs and videos. In case you have any doubts, ask your insurance agent. Then, once it is accepted, you will have to pay the policy deductible. The good news is that you can choose to set the amount at 5%, 10%, 15%, 20% or 25% of the dwelling coverage.

You should also understand that the deductible is not a bill. This means you won’t have to take all the money from the bank account and give it to the insurance company. Instead, the amount is subtracted from the settlement. Keep in mind that if the damage is lower than your deductible, you won’t receive any money.

How to know if I need earthquake insurance?

To determine if this policy is necessary in your case, you need to take several steps.

  1. There are some homeowner’s insurance policies that include earthquake home insurance. That’s why, before purchasing any add-on, you need to check your current coverage.
  2. Investigate if you live in a high-risk area. You can find this out by asking your insurance agent.
  3. Think about what would happen if an earthquake occurred in your city. Consider if you would have enough money to repair your home and replace all personal property. If you can’t afford this, then the best thing you can do is to purchase the insurance policy.

Final Thoughts

In this article, we have explained how earthquake home insurance works, plus what is included in the policy. However, one last thing you must know is the cost. Remember that this could vary depending on the provider you choose. But, overall, it can range between $800 and $900 annually. We know that this sounds expensive. But the good news is that this will only be necessary if you live in a high-risk area.