Earthquake insurance: How does it work?

Homeowners insurance excludes earthquake damage, but homeowners can purchase earthquake insurance. Like homeowners insurance, earthquake insurance includes dwelling, personal property, and loss-of-use coverage, but coverage limits and deductibles differ.

Homeowners insurance excludes coverage for certain natural disasters, like an earthquake or a flood, meaning damage caused by those perils won’t be covered by your regular home insurance. If you live near a fault line, or if your home is in a state that experiences volcanic eruptions, you may want to consider purchasing separate earthquake coverage.

Earthquake insurance protects your home and personal property in the event of an earthquake. It can also pay for additional living expenses while your home is being repaired or rebuilt. If you don’t want to buy earthquake insurance, you may be able to add an earthquake endorsement to your homeowners policy, however it won’t offer as much protection as a standalone earthquake policy.

Key Takeaways

  • Homeowners insurance excludes coverage for earthquake damage

  • You can typically buy earthquake insurance through your homeowners insurer, or you can add an endorsement to your homeowners policy

  • Earthquake insurance covers quake damage to your home and personal property. It also includes loss-of-use coverage

  • Earthquake insurance deductibles are typically 5% to 25% of your home’s insured value, which can be a pricey out-of-pocket expense

How does earthquake insurance work?

An earthquake insurance policy is financial protection for your home and personal belongings in the event of earthquake damage, as well as damage by volcanic eruptions. If you live near a fault line, or in an area that is at-risk for seismic activity, you may want to consider purchasing earthquake insurance.

You may be able to buy an earthquake policy from the same company that insures your home, but coverage options will vary from company to company. If you live in California, you’d likely buy earthquake insurance through the California Earthquake Authority (CEA). You can read more about the CEA here.

Your homeowners insurance carrier may also offer an earthquake endorsement that you can add to your policy, however endorsements don’t offer as robust of coverage as a standalone earthquake policy. An earthquake policy works similar to a homeowners policy, however the coverage limits and deductibles are different.

Earthquake insurance coverages

Earthquake insurance covers you from direct physical property loss after an earthquake or volcanic eruption. You may also be covered from damage caused by an earthquake’s aftershocks, depending on your policy. Like homeowners insurance, an earthquake insurance policy is made up of different components of coverage, and each component offers a different form of protection.

Below are the standard coverages and the option coverage add-ons that make up an earthquake insurance policy.

CoverageWhat does it cover?
Dwelling coveragePays to repair or rebuild your home if damaged by an earthquake (up to your coverage limit)
Personal property coveragePays to repair or replace your personal property after quake damage
Additional living expensesPays for you to stay elsewhere, like a hotel, if your home becomes uninhabitable after an earthquake. Can also pay for accrued expenses while you're displaced, like for gas, groceries, or restaurant expenses
Building code upgrade (optional coverage)Add-on that covers cost of repairs should your home no longer be up to local building codes
Emergency repairs (optional coverage)Add-on that pays for immediate repairs to stabilize your home or personal property in order to prevent further damage

Get the right advice, right here.

No sweaty sales pitches. Just unbiased advice from licensed experts.

How much does earthquake insurance cost?

The cost of earthquake insurance depends on different factors, like where you live and how much coverage you buy. For example, if you live in a state that rarely experiences earthquakes your premiums may only be a few hundred of dollars a year, but if you live near a fault line in California, your premiums could be as high as thousands of dollars annually.

When calculating your premium, your earthquake insurance company will also consider the following factors:

  • The age of your home

  • Your deductible

  • Your home’s rebuild price

  • Discounts that you qualify for

  • Your home’s foundation

When does earthquake insurance not cover you?

Earthquake insurance policies are specific about what is and is not covered. For example, if an earthquake results in a fire, your earthquake insurance would not cover the fire damage, however your homeowners insurance will.

Earthquake insurance also does not cover the below circumstances:

  • External water damage (your homeowners insurance may cover this, depending on the damage)

  • Floods

  • Vehicle damage

  • Damage to your landscaping

  • Neglect and wear and tear

How do earthquake insurance claims work?

You can typically file an earthquake insurance claim over the phone or online. Your insurance company will send a claims adjuster out to inspect the damage and assess the price of repairs or rebuild costs.

As with homeowners insurance, when you file an earthquake insurance claim for damage to your home or personal property, you’ll need to pay a deductible. Earthquake insurance deductibles work differently than homeowners insurance deductibles, which are typically a set-rate of $500 or $1,000 per claim.

Instead, earthquake insurance deductibles are typically 5% to 25% of your coverage limit. Earthquake insurance dwelling coverage limits are usually the same as your homeowners dwelling limit.

For example, say your home is completely destroyed by an earthquake and you have a dwelling coverage limit of $200,000 and an earthquake deductible of 10%. You’d have to pay your insurer your $20,000 deductible before they’d pay for the costs of the damage caused by the earthquake. You may also have to submit a claim in a certain time frame, meaning you can’t file a claim two years after the earthquake happened.

How to buy earthquake insurance

As we mentioned, you may be able to buy an earthquake insurance policy from your homeowners insurance company. If your insurance company doesn't sell earthquake policies and doesn't offer earthquake endorsements, check with your state’s insurance department’s website, they may have information on where to buy earthquake insurance.

There are a few things you may want to do when shopping for earthquake insurance.

  • Determine your home’s risk

  • Decide how much coverage you need (and how much you can afford to pay out of pocket)

  • Learn if your home needs retrofitting (some insurers may offer discounts if you get your home retrofitted to better withstand earthquakes)

  • Shop around different insurers (insurance companies may offer different rates and discount options)

Learn more about whether earthquake insurance is worth it for you