Renters insurance has three main purposes: it covers your personal property, your legal expenses if you’re sued for an accident, and your additional living expenses if your home becomes uninhabitable due to a covered peril.
Your renters insurance policy will explain which hazards are covered, which include bad storms, fire, theft, and more, but almost every renters insurance policy excludes earthquake damage from coverage. Similar to how you need flood insurance to cover floods, you may need to add an earthquake endorsement to your renters policy or get a separate earthquake insurance policy to cover quake damage.
Earthquakes are excluded from standard renters insurance coverage under the “earth movement” exclusion, which include tremors, landslides, and sinkholes. Your renters insurance policy may, however, cover the indirect consequences of such a catastrophe, such as a fire.
How do earthquake endorsements work?
If you live in an earthquake-prone area, you should consider getting earthquake insurance in addition to renters insurance, as renters insurance doesn’t cover damage caused directly by earthquakes. However, you may be able to add an earthquake endorsement to your renters insurance policy. You can add an endorsement at any time during your policy, so if you move from Philadelphia to Los Angeles and suddenly need earthquake coverage, you should be able to add it when you move.
An earthquake endorsement will cover your personal property if it’s damaged by an earthquake. For example, if an earthquake causes your computer to fall off your desk and break, an earthquake endorsement would cover the cost of the computer up to your policy’s limit.
Can you combine earthquake and renters insurance claims?
When you add an earthquake endorsement to a renters insurance policy, you’ll have many of the same coverages available to you with renters insurance, like personal property coverage and loss-of-use coverage.
If the earthquake leads to another peril like fire or theft, your renters insurance will cover it. If your property suffers earthquake damage and fire damage from the earthquake, you’d only have to file one insurance claim. Depending on your policy and insurer, you may only have to pay one deductible as well.
When should you get a standalone earthquake insurance policy?
Despite improvements in sensor technology, earthquakes remain difficult to predict. Unlike other natural hazards that you can plan for, like hurricanes, it may not be apparent that you needed earthquake insurance until you’re staring down a pile of your grandmother’s smashed china that slid off your shelf in the last tremor.
Most earthquakes, if they register at all, may cause little to no damage. But if you don’t have earthquake insurance, you could be on the hook for thousands of dollars. More importantly, your earthquake coverage could provide money to pay for alternative accommodations, or what’s called loss-of-use coverage, should your home become unlivable due to an earthquake.
Earthquake insurance may be purchased from the same carrier as your renters insurance, but check with them first, as smaller carriers may not offer it.
How much does earthquake insurance cost?
Whether you choose the standalone earthquake insurance policy or an endorsement to your base renters insurance policy, be ready to pay a significant amount if you live in an area that experiences frequent quakes. Earthquake coverage is often expensive, with premiums as high as $800 to $3,000 per year in high-risk areas, compared to just $150 to $300 per year for a standard renters insurance policy.
Keep in mind that carriers consider factors like the condition and age of your rental building when setting your rates. The building’s structure isn’t covered by your renters insurance policy, as it’s owned by the landlord and covered under their landlord policy. But because earthquake insurance will reimburse you for belongings destroyed as the direct result of an earthquake, the insurance company needs to know how likely it is that the rental building will collapse. For that reason, older homes and apartments in older buildings may be more expensive to cover.
Exclusions for earthquake insurance
When you have earthquake insurance, it’ll cover any property damaged during a period of time from the beginning of the first earthquake to the end of the period some number of days later, to account for aftershocks and hidden damage. A typical provision puts this period at 168 hours, or seven days, so everything damaged from hour 1 to hour 168 during that time may be eligible for reimbursement. The clock resets after that period.
Any earthquake damage that occurs before you took out the earthquake insurance policy or endorsement will not be covered. Depending on the company, your earthquake insurance coverage could exclude other types of earth movement-related catastrophes like landslides, erosion, floods, lava flow, and mudslides, even if they were caused by the earthquake.
While earthquakes are covered by your earthquake insurance policy or endorsement, keep in mind that you may have to pay a deductible on earthquake claims. The deductible is the amount of money you pay out of pocket before the insurance carrier pays for the remainder of the loss.
The price of your renters insurance deductible will be written out, along with your premium and other relevant dollar amounts, on your policy declarations sheet. If you have an earthquake endorsement, a separate deductible may apply to earthquake damage, depending on your policy and insurance provider. If you get earthquake insurance as a standalone policy, the deductible will be listed on that policy’s declarations sheet.