What Does Earthquake Insurance Cover?

Earthquakes can cause significant damage to homes and properties, often without warning. Earthquake insurance is a specialized policy that can help cover the costs of repairing or rebuilding your home after an earthquake. However, while the protection offered by this type of coverage can be valuable, you should fully understand it to ensure your policy is suitable.

How Does Earthquake Insurance Work?

Earthquake insurance typically includes the following components:

• Structural coverage can cover the cost of repairing or rebuilding your home and other structures on your property, such as garages or sheds.
• Personal property coverage may cover personal belongings damaged during an earthquake.
• Additional living expenses coverage can cover the cost of living elsewhere while your home is being repaired.

Policies usually have a deductible, which is an amount that must be paid out-of-pocket before the insurance kicks in.

Why Do I Need This Type of Insurance?

It’s important to note that standard homeowners’ insurance policies do not cover earthquake damage, making a separate earthquake insurance policy necessary, especially for those in high-risk areas. These seismic events can cause extensive damage and devastating financial consequences for those with insufficient coverage. Without insurance, you would be responsible for all repair and replacement costs and may lack the means to rebuild your home altogether.

How Are My Rates Calculated?

Several factors can influence the cost of earthquake insurance, including the following:

• Location—Homes in high-risk areas, such as those near fault lines, may have higher premiums.
• Home characteristics—The age and construction type of your home can affect rates. Older homes or those not built to current earthquake-resistant standards may cost more to insure.
• Policy details—The coverage limits and deductible you choose can impact your premium. For example, higher coverage limits can provide more financial aid at typically higher costs. Similarly, a lower deductible may reduce out-of-pocket costs when submitting a claim but will likely incur more expensive rates.

Get the Right Coverage

Contact the Rock Insurance Agency today to learn more about earthquake coverage options or get a free quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.