If you live near a fault line and you can afford to foot the bill on top of homeowners insurance costs, then earthquake insurance might be worth it.
Updated February 23, 20223 min read
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A basic homeowners insurance policy does not cover damage caused by earthquakes, though it will cover fire damage that occurs as a result of one. Otherwise, to actually cover your home and belongings from the direct effects of a quake, you’ll need a separate earthquake insurance policy.
Earthquake insurance costs thousands of dollars a year — and this is on top of your standard home insurance policy.
Earthquake insurance is more expensive in areas located near fault lines that are at higher risk for quakes.
The high policy cost and high deductibles lead many homeowners to go without earthquake insurance.
If you live in an earthquake-prone area and you’re on the fence about earthquake insurance, you’ll need to weigh whether the risk of losing your home and not having coverage is worth the cost of the policy itself.
Not all earthquakes cause catastrophic damage. In fact, of the 10,000 earthquakes that occur in southern California each year, most are so small that they’re not even felt.  Add to this the high premiums that come with earthquake insurance in high-risk zones near fault lines, and you’re probably thinking about skipping out on coverage. However, like anything else, all it takes is one large earthquake to cause extensive structural damage to your home and surrounding areas.
Here are a few pros and cons to help you decide if earthquake insurance is worth it for you.
Covers the cost to rebuild your home and replace your belongings if they’re destroyed by an earthquake
Covers the cost of hotel stays, restaurant meals, pet boarding, and other living expenses if you need to temporarily live elsewhere while your home is being rebuilt after a quake
You may be able to add earthquake coverage to your existing homeowners policy.
Check with your insurance company to see if you can add an earthquake endorsement to your existing policy for a small fee. While this type of earthquake coverage is typically less comprehensive than a standalone earthquake policy, it’s also cheaper.
If you're on the fence about whether earthquake insurance makes sense for you, start by taking a look at your home's earthquake risk. You can get an idea of how close you live to a fault line by looking at the National Seismic Hazard Map. You might live closer to a fault line than you originally thought. From there, you can weigh the risks against the premiums to decide if earthquake insurance makes sense for your home and finances.
Homes in certain parts of California, Alaska, Oregon, Washington, Nevada, and Hawaii are at particularly high risk of earthquake damage, and tremors are also becoming common in parts of Texas and Oklahoma where fracking (hydraulic fracturing) is common.
Be sure to ask your homeowners insurance agent about whether or not it’s necessary for you to purchase earthquake coverage. The United States Geological Survey (USGS) also includes a list of factors that you should consider when evaluating your earthquake insurance needs, including: 
Your home’s proximity to an active fault
Frequency of earthquakes in your region
How long it’s been since the last earthquake
Your home’s construction type — if it’s a stone or brick home, it has a higher probability of being damaged by an earthquake
The soil condition and slope of the land
Whether or not your home is built specifically to withstand earthquakes
The cost of earthquake insurance and policy factors — like the deductible amount
If you have a mortgage, the amount of equity you have in the home may also influence your decision.
If your mortgage is mostly paid off and the bank no longer owns much of your home, you may be more inclined to purchase earthquake insurance. The more equity you have in your home, the greater incentive you have to make sure it’s covered for a rebuild after a quake. On the other hand, if the bank owns most of the home and you’re comfortable walking away from your damaged home after an earthquake, then it might not make sense to purchase earthquake insurance.
The cost of earthquake insurance is largely determined by the amount that it would cost to rebuild your home at the current prices of construction and labor. Your dwelling coverage limit should be equal to this amount, not your home’s sale price.
In California, every $100,000 of earthquake coverage will cost you $500 to $1,000 in annual premiums. So a larger home is naturally going to have much higher rates than a small or mid-sized home.
Other factors that go into determining your rates include:
Your home’s age and location
Your home’s foundation — slab or raised
Your deductible — the higher your deductible, the lower your rates
The construction type of your home — frame or masonry
When we ran a sample quote for earthquake insurance through the California Department of Insurance, we found that masonry homes cost a staggering $2,000 more to insure annually than frame homes. 
To keep your rates down, check with your insurance provider to see what kind of discounts or credits are available.
The California Earthquake Authority, for example, offers discounts of up to 20% for frame-constructed homes that were built before 1960 if they’re retrofitted with earthquake-proof structural features like foundation bolting and cripple wall bracing. If you own a newer home, your rates will already be lower since it’s likely built up to code.
When you file a claim for earthquake damage to your home, you’ll have to pay your policy deductible before your insurance will kick in to cover the remainder of the loss. Earthquake policies generally use “percentage” deductibles, which means you’ll pay a percentage of your home’s coverage amount rather than a fixed dollar amount.
Most insurers give you the option of earthquake deductibles between 5% and 25%. If you file a claim for damage to your home’s structure and belongings, most insurers will make you pay separate deductibles for the dwelling and personal property portions of your policy.
Here’s an example of how earthquake deductibles work on a specific policy.
|Dwelling coverage||Personal property coverage||Total|
|Amount you’re responsible for||$30,000||$2,000||$32,000|
|Amount insurer is responsible for||$70,000||$78,000||$148,000|
In this example, the structure of the home is insured for $200,000 with a 15% deductible, and the personal belongings are insured for $100,000 with a 2% deductible.
If the home and belongings incurred $100,000 and $80,000 in earthquake damage, respectively, the policyholder would be responsible for paying $32,000 in deductibles before they’d be reimbursed the remaining $148,000 of the loss.
Earthquake deductibles are pricey.
If you can’t afford to pay your deductible and you live in a FEMA-designated disaster area, you may be able to get financial assistance from FEMA or the California Department of Insurance. Another option is to take out a low-interest loan with the Small Business Administration (SBA), which offers disaster loans to both homeowners and small business owners alike after a natural disaster.
Earthquake insurance covers the cost of rebuilding your home or replacing your belongings after an earthquake or the aftershocks that follow.
Bear in mind earthquake insurance will not cover perils caused by earthquakes, like fires or flooding. You’d have to file a home insurance claim to cover fire losses after an earthquake or a flood insurance claim to pay for any flood damage.
A standard earthquake policy consists of the following coverages:
Dwelling coverage: Covers the cost of repairing or rebuilding your house and any attached structures, like a garage or patio.
Personal property coverage: Covers the cost of repairing or replacing damaged belongings, including furniture, clothing, appliances, and electronics.
Additional living expenses: Covers temporary living expenses if you need to stay elsewhere while your house is being repaired.
Insurers also offer optional coverages that you can add to your earthquake policy for an additional cost. The most commonly offered add-ons are:
Building code upgrades coverage: Pays the added cost of rebuilding your house up to current building codes
Emergency repairs coverage: Covers the cost of immediate repairs intended to prevent further damage after a quake.
Earthquake insurance is available through both major insurance providers and specialized earthquake insurers.
Earthquake coverage can be purchased as an optional home insurance endorsement or as a separate policy. If you live in California, you can purchase earthquake insurance through the California Earthquake Authority — a privately funded, publicly managed entity that provides coverage to state residents who live near high-risk fault lines.
The Golden State accounts for around two-thirds of the country’s earthquake risk, and 61% of the country’s average annual earthquake losses occur in California. Suffice it to say, if there’s anywhere homeowners should carry earthquake insurance, it’s in California. If you live within 30 miles of an active fault (you can check for that here), you should consider insuring your home against earthquake damage. Earthquake insurance can be purchased through the California Earthquake Authority. If you’re looking to keep costs down, the CEA says it has flexible insurance offerings that can be tailored to meet your budget.
Homeowners insurance doesn’t cover “earth movement,” including damage directly caused by earthquakes. So if you don’t have earthquake coverage, then you’ll have to cover any earthquake damage out of pocket. If the quake is declared a “major disaster” by the federal government, affected residents may be eligible for a limited amount of public assistance funds.
The average cost of home repairs after an earthquake is anywhere from $4,000 to $30,000, according to Home Advisor.