Does Homeowners Insurance Cover Earthquakes?

Securing earthquake insurance is crucial to protect homes and belongings in areas with a higher risk of earthquakes. Though many quakes cause only mild ground shaking, a single major event can devastate communities.

With 42 states at risk, according to the Insurance Information Institute, it's important to obtain coverage before disaster strikes. Earthquake insurance covers home repair, personal property replacement, and temporary living expenses. While premiums can be costly, they offer protection against out-of-pocket rebuilding costs.

To help you choose the best policy, consider insurers' unique coverage options, financial strength, and ratings from agencies like AM Best and JD Power.

Does Homeowners Insurance Cover Earthquakes?

Home insurance protects homeowners from damage to their homes and property covered perils.

Covered perils are named events specifically listed in your homeowners policy that may cause damage to your home or your personal belongings and which you could not have foreseen.

A standard or basic homeowners insurance policy will protect you from covered perils such as theft, vandalism, explosion, fire, lightning, hail, ice, snow, sleet, wind, windstorm, hail, smoke, hurricanes, tornadoes, extreme cold, volcanoes.

Standard homeowners insurance mostly does not cover earthquakes or other natural disasters such as floods, tsunamis, or nuclear disasters.

If you want to be covered, you must purchase an additional earthquake insurance policy that will pay to rebuild your home or replace your belongings after a quake hits your area.

Where Do You Buy Earthquake Insurance?

Usually, you purchase earthquake insurance through your homeowner's insurance.

California residents usually purchase earthquake insurance through the CEA (California Earthquake Authority), the most trusted source for earthquake protection.

CEA offers coverage for the house's structure, building code upgrades, and emergency repairs.

It also provides separate coverage options for belongings (with a separate, lower deductible) and additional living expenses (with no deductible).

Who Should Purchase Earthquake Insurance?

You should get earthquake insurance if you live in a state where frequent earthquakes occur.

In fact, because of the damage they leave behind, purchasing earthquake insurance is a must.

Earthquakes are unpredictable; however, tremors can be felt miles and miles from where they begin, meaning damage is virtually impossible in all fifty states.

So, an earthquake could still damage your home even if you do not live in a high-risk area.

And even if your state only has one or maybe two earthquakes per year, it takes only one sizeable seismic shift to significantly damage or eradicate your home.

If tremors are less frequent where you live, getting an earthquake policy may also be a good idea.

Or use this guideline:

If you live within 30 miles of an active fault, you should consider insuring your home against earthquake damage.

Which Companies Are the Best for Earthquake Home Insurance?

Allstate: Best Overall

Allstate is best overall due to its discounts that can lower your premium, its variety of add-on options and insurance products, and its easy claims process.

Also, Allstate’s mobile app and website make it easy to check your policy, make payments, and file claims without wasting time by calling customer service, where you may be put on hold for a long time.

Allstate’s homeowner's insurance allows you to add earthquake coverage to your existing policy easily.

You don’t have to worry if the insurer will pay out if you file a claim for earthquake damage.

That’s because the insurer has excellent financial strength and will not delay payments no matter how much the damage costs.

Allstate offers earthquake insurance nationwide.

And, unlike other earthquake policies, Allstate covers structures on your property, such as pergolas, fences, sheds, and detached garages.

Allstate’s earthquake insurance also offers loss of use coverage, which means you don’t have to pay out-of-pocket if you have to stay at a hotel while your home and property are being repaired after earthquake damage.

Read a full Allstate homeowners insurance review.

Amica: Best for Covering California

Amica is a top pick for earthquake coverage in California because of its partnership with the California Earthquake Authority (CEA), the most trusted source for purchasing earthquake protection in California.

The partnership covers the standard earthquake policy. But unlike other insurers, building code upgrades and emergency repair coverage come standard in the policy and not as an add-on.

Building code coverage is used on homes destroyed by earthquakes to keep them up to code and, thus, up to date.

Emergency repairs coverage covers immediate repairs to prevent further damage after an earthquake.

To get earthquake coverage, buy it as an add-on with Amica.

Despite the partnership, policyholders file claims not with CEA but with Amica.

This is a benefit because you can access Amica’s highly-rated customer service and use its excellent online claims center, which is accessible to everyone.

However, one drawback is that you can’t add earthquake insurance to your existing homeowner's insurance online or on the app. It would be best to speak with an agent to get the coverage.

Still, talking to a rep can be helpful. You can ask any questions about the policy. In some ways, earthquake coverage can be confusing, and it may be hard to differentiate what it covers and does not.

The rep can also give you more information about the deductible, which is unique and is unlike your typical deductible and needs to be explained. Hence, the customer knows precisely its cost.

You should also note that Amica offers many add-ons you can purchase with your homeowner's insurance policy, including flood insurance coverage, personal property replacement coverage, valuable items coverage, and more.

American Family Insurance: Best for Covering Multiple Types of Properties

American Family Insurance, founded in 1927, is among the most popular insurers in the United States and is highly rated by AM Best.

AFI has one of the best earthquake policies in the nation. It covers many things excluded in other policies, which you must pay extra if you want the protection.

These include coverage for detached garages or other structures on your property, such as fences, driveways, sidewalks, and other permanently installed yard fixtures.

But AFI is also top-notch because its earthquake coverage covers many types of homes.

In addition to protecting a traditional single-family home, the earthquake policy covers manufactured homes, condos, and rentals.

For condo coverage, the policy will cover damage to the unit, your personal property, your permanently installed fixtures, and your major appliances, the last of which is uncommon in a standard earthquake policy.

For manufactured homes, insurance will cover them entirely, as well as your belongings stored inside.

For rental coverage, the earthquake policy will provide added protection to your personal property and any additions or alterations you made to the unit at your own expense, such as installing wallpaper or putting up built-in bookshelves.

Liberty Mutual: Best for Renters

Initially founded in 1912, Liberty Mutual has offered high-quality insurance for diverse needs for over 100 years and received an A grade by AM Best due to its high financial strength.

We chose Liberty Mutual because the insurer offers earthquake insurance for renters, not just homeowners.

This is a standout since most providers do not offer earthquake insurance for renters.

However, renters may also want earthquake coverage to protect their personal belongings even if they do not own the apartment, condo, or house they rent.

You can apply for earthquake insurance as a renter by using Liberty Mutual’s website.

Liberty Mutual’s earthquake insurance also goes the extra mile. It covers damages caused by earthquakes and aftershocks that occur within 360 hours.

This unique coverage is not standard in most earthquake insurance policies.

In addition, the insurer also stands out because you can easily file and oversee a claim using its website or highly-regarded and intuitive mobile app.

Read a full Liberty Mutual home insurance review.

Nationwide: Best Personal Property and Loss of Use Coverage

Nationwide offers exceptional earthquake coverage that you buy as an add-on to your homeowner's insurance policy.

One reason is the company’s loss of use coverage. Loss of use is an integral part of earthquake insurance. It will pay you if you have to stay elsewhere, such as a hotel, while your home is being repaired after an earthquake damages it.

Another reason is that since seismic shifts can be very detrimental, your personal property will likely be destroyed or severely damaged.

However, the cost to replace your belongings could exceed your policy coverage limit.

That’s why Nationwide steps in to help cover the costs. It offers a depreciated value on your covered items.

However, Nationwide will pay the difference after you purchase replacements, and you must send the insurer your receipts.

Also, the insurer stands out because the earthquake insurance policy can be lowered if you choose a higher deductible, retrofit your home, or install seismic shut-off valves and other things to make your home less susceptible to earthquakes.

Deductible

The larger the earthquake deductible, the less you will pay in premium.

Retrofitting

This strengthens the structure of your home to help protect it from damage due to earthquakes: foundation bolting and cripple wall bracing help. And so, too, does a seismic shut-off valve.

Shut-Off Valve

The shut-off valve will close gas lines when an earthquake hits. In this way, when that happens, it helps prevent further loss from an earthquake when a fire occurs and causes the gas line to rupture.

Nationwide also partners with the CEA, just like Amica, because its earthquake insurance endorsement covers all states except California.

With this partnership, Nationwide and the CEA provide alternative solutions for earthquake coverage in California.

How Earthquake Insurance Works?

Earthquake insurance provides coverage for your dwelling if an earthquake causes damage to it.

Earthquakes are not covered by most standard homeowners insurance.

To get earthquake coverage, add it to your homeowner's insurance policy as an endorsement or rider at an extra expense.

For example, suppose the seismic activity causes a crack in your foundation. In that case, your earthquake insurance will cover the damage after you pay the deductible, the amount you owe before your insurance kicks in.

Without earthquake coverage, you would be stuck with that foundation crack.

It is unsafe, to say the least, and would reduce your home’s value if you didn’t have out-of-pocket expenses to pay for repairs.

The amount of earthquake coverage you can buy will depend on your insurer.

But look out for what you are buying.

For example, if you purchase earthquake insurance with only $100,000 of dwelling coverage, that might not be enough to rebuild your home if it is entirely or nearly destroyed.

What Does Earthquake Insurance Cover?

Four main areas are covered when it comes to earthquake insurance. These are personal property, loss of use, structural repairs, and building code upgrades.

The table below clearly highlights in detail what each one of these encompasses.

What Typically Gets Damaged by Earthquakes?

The most significant liability caused by earthquakes is their unpredictability. You never know when an earthquake will strike and how much damage it will cause to your home and property.

Because earthquakes cause major ground movement, they often cause the following damages:

• Falling trees
• Rockslides
• Structure collapses
• Fires
• Dam or waterway breaches
• Roadways and other infrastructure

To protect yourself from earthquakes, purchase it as an add-on with your homeowners insurance company, take out a separate policy, or turn to a private insurer that sells earthquake insurance.

This means that if possible damage from an earthquake is a concern, you should go with a homeowners insurance company offering an additional earthquake policy.

With earthquake coverage, you get peace of mind that if an earthquake occurs and destroys or damages your home, you’ll be covered in full.

Which States Have the Most Earthquakes?

The states that tend to get the most earthquakes on average are California, Alaska, Hawaii, Idaho, and Kentucky.

But 42 states also get high amounts of seismic activity.

These include Alaska, Kentucky, Nevada, Hawaii, Washington State, Wyoming, Idaho, Montana, Utah, Oregon, Missouri, South Carolina, and the mountain areas of North Carolina.

Why Do Homeowners or Renters Skip Earthquake Coverage?

One reason is that, like flood insurance, earthquake insurance isn't mandatory in all states.

Unlike homeowners insurance, your mortgage insurer won't require it.

Also, people commonly mistakenly believe earthquake insurance is covered by homeowners insurance.

Another reason is that people who don't live near a fault line think seismic activity can't happen.

Take, for example, a state like Oklahoma, which is not prone to earthquakes. Still, they are now an occurrence due to recent constant oil drilling activity and industrial wastewater being injected underground into products.

An additional reason is that an earthquake insurance policy is costly, leading many homeowners to risk it and forgo coverage to save money.

Earthquake premiums are costly because earthquake damage tends to be catastrophic, making them a higher risk for insurers.

So, to cover costs, insurers need to make earthquake deductibles high.

In California, where earthquakes are prominent, just 10% of homeowners have earthquake coverage, while the rest live at risk.

According to the California Earthquake Authority (CEA), the country's largest earthquake insurance provider.

Key Takeaway:

People don't buy earthquake coverage because:

• They don't think an earthquake would impact them.
• They mistakenly believe earthquake insurance is covered by homeowners insurance.
• They think the deductible is too high.
• It costs too much.

How to Decide if You Should Get Earthquake Insurance

If you don't have earthquake insurance or think it's not worth it, ask yourself the following:

Do you have out-of-pocket costs or enough money to rebuild your home entirely after an earthquake damages or causes destruction?

Do you have extra cash to replace your possessions destroyed by an earthquake?

Do you have money to stay at a hotel or a motel and eat meals at restaurants after an earthquake damages the structure of your home to the point that it is uninhabitable?

You should consider earthquake insurance if you answered "no" to all the questions.

What Should You Consider When Buying Earthquake Insurance?

It would be best if you considered the below factors when deciding whether purchasing earthquake insurance makes sense for you:

If you live near an active fault line.

The frequency of earthquakes in your area.

If you do not have enough money in savings to rebuild your home in the event of earthquake destruction.

If your homeowner's insurance does not cover earthquake-related damages.

Your home's construction type, layout, materials used, and quality.

Was your home built with earthquakes in mind?

The land your foundation sits on, including soil and the slope of your land.

The amount of annual rainfall.

The value of your home and its contents.

The cost to insure the home.

What is Not Covered by Earthquake Insurance?

Earthquake insurance has many exclusions.

As such, you need to read the fine print to know what your earthquake insurance does not include or cover.

That way, you'll know what to purchase as add-ons to cover the exclusions.

Some things that earthquake insurance does not cover include satellite dishes and antennas, personal property located outside of your home, animals, birds, or fish, decorative items or works of art, such as murals, sculptures, fountains, aquariums, stained or led glass, mirrors, chandeliers, and swimming pools, spas, and hot tubs.

Now, here are the most critical exclusions:

Fires

Earthquake insurance does not cover disasters caused by earthquakes, such as damage caused by fires or flooding.

Since fire is covered in a standard home insurance policy, you would have to file a home insurance claim to cover fire losses after a quake.

Floods

A homeowners insurance policy never covers floods and is not covered by earthquake insurance. You'll need to purchase a separate flood insurance endorsement even if the flood is a byproduct of an earthquake.

Vehicle Damage

If an earthquake damages your car, your earthquake and auto policies will not cover the repair or replacement.

To get coverage for your automobile, you need to buy "comprehensive insurance" from your auto policy, which will pay for damage from hazards unrelated to collisions, such as earthquakes.

So, you'll be covered if a tree falls on your car.

Sinkholes

Some states require insurers to offer sinkhole insurance, or you can tack it on to your homeowner's insurance at a cost or purchase separate coverage for sinkholes, also at a price.

Masonry

Masonry includes the brick, stone, or rock used for your home's veneer.

Unfortunately, an earthquake policy does not cover homes with masonry veneers.

You'll need to buy extra coverage to get your earthquake policy to pay for this type of exterior repair.

So, the extra coverage would be an added expense on top of the cost of earthquake insurance.

Earthquake insurance doesn't cover all damage caused by an earthquake. You may have to purchase add-ons to your policy to pay extra for the exclusions.

How Much is the Cost of Earthquake Insurance?

Earthquake insurance can be expensive.

If you need it, the more likely it will cost you.

The cost of earthquake insurance is mainly determined by risk.

If you live in a high-risk area, the cost of earthquake insurance may exceed that of your homeowner's insurance.

The average cost of homeowners insurance nationwide is $1,680 per year or $140 per month.

So, you may be paying that or much more.

The average annual earthquake premium starts at $800 and can go up to $5,000 if you live in a quake-prone area.

Of course, if you live in a low-risk area, your earthquake policy will cost less, around only $300 a year.

It's better for those living in low-risk areas or on the East Coast.

According to the Insurance Information Institute, earthquake insurance costs as little as fifty cents per $1,000 coverage.

So, if your home is worth $250,000, your earthquake policy will cost only $125 per month.

What is the Deductible for Earthquake Insurance?

Your earthquake rider will have a separate deductible since it's a separate policy from your standard homeowner's insurance.

Your policy deductible can be expensive if you live near an active fault line, often 10% -20 % of your coverage limit.

This deductible- what you must pay out-of-pocket before your policy kicks in is typically determined as a percentage of your home's insured value.

For example, say your earthquake deductible is 15% of your home's value of $300,000.

Thus, your deductible will be $45,000.

That's exorbitantly high, but the deductible can be far cheaper than spending $300,000 or more to rebuild your home. 

How Much is Earthquake Insurance in California?

California is the riskiest state. Homeowners experience multiple earthquakes every year.

On average, the rate for earthquake insurance in California is $1.75 per month for every $1,000 of coverage.

Let's say the cost of your home is $250,000. For earthquake insurance, it will cost you $437 per month.

That's on top of your homeowner's insurance policy. Using the national average quoted above and adding in the cost of earthquake coverage, you'll be paying $577 a month.

Earthquake insurance for those who need it the most will always be expensive.

However, the cost of not being insured after a disaster could be far more significant.

How Much Does it Cost to Repair Earthquake Damage?

The average cost of home repairs after an earthquake is anywhere from $4,000 to $30,000.

What are the Factors Affecting the Cost of Earthquake Insurance?

Other factors can affect the cost of earthquake insurance outside of geography:

The age of your home

Newer homes tend to have better materials and can be designed with earthquakes in mind, so they typically cost less to insure than older homes.

The number of stories your home has.

Taller homes have a greater chance of toppling over, so they're usually more expensive to insure.

Framing materials

Homes with wood frames cost less to insure because wood is more elastic than other materials.

Foundation materials

Raised foundations, or homes built on sandy soil like loam instead of clay or rock, give a home elasticity. This means your premium will be lower.

You are making your home safe from earthquakes.

If you stabilize your home to circumvent the chance of damage from an earthquake, you'll pay less.

Examples include bolting your home to its foundation, bracing the chimney and water heater, installing automatic gas shut-off valves, and using plywood to make crippled walls stronger.

Are There Ways to Lower Your Earthquake Insurance Rate?

Like homeowners insurance, you should check with your home insurer to see if it offers any discounts that can lower your rate.

For example, CEA offers up to 20% discounts for frame-constructed homes built before 1960 if they are retrofitted with earthquake-proof structural features like foundation bolting and crippled wall bracing.

If you own a newer home, your rate will be low since it's built up to code.

Should Renters Purchase Earthquake Insurance?

Even if you don't own the apartment or home you are renting and your landlord will pay for exterior and structural damages from an earthquake, earthquake insurance is a good idea.

During an earthquake, your possessions will shift and fly around your rental, causing damage to your furniture and your electronics, like your smart TV and your laptop.

If you can't come up with the costs to replace your belongings, then renters earthquake insurance can be a necessity.

And what would happen if the earthquake caused severe damage to your walls, ceilings, windows, or any structural parts of your rental that could make it uninhabitable?

You'd have to move elsewhere until your rental is repaired.

But where would you go?

If you don't have family or friends nearby, or they can't accommodate you because of a lack of space, you may have to stay at a hotel or a motel.

Where would you get the money to pay for temporary living arrangements?

With renter's earthquake insurance, you know your belongings will be replaced, and your temporary housing and essentials like meals will be covered.

An added plus is that a renter's earthquake insurance is significantly cheaper than a homeowners insurance earthquake policy.

For example, you may pay as little as $35 a year for a renters policy in California.

Our Methodology

We thoroughly researched 20 homeowners insurance companies that provided earthquake coverage and narrowed the list down to those with the best coverage, positive rating site grades, and useful technology.

Coverage

When searching for the best insurers that offered earthquake insurance, we looked at the ones with coverages that came standard in an earthquake policy and not as an endorsement so that people looking to be covered did not have to pay exorbitant premiums.

For example, if a policy covered damage to a home after an earthquake and structures on the property, such as pergolas, fences, sheds, and detached garages, we put that insurer on our list.

There are two popular coverages, building code coverage and emergency repairs coverage, to note.

Again, if these coverages come standard in an earthquake policy and not as an endorsement, we looked at these coverages with favorable terms.

Rating Company Reviews

We also looked at highly rated insurers by rating company sites such as JD Power and AM Best.

If AM Best claimed that an insurer had a high financial strength, we noted that. If JD Power stated that a company had good claims satisfaction, we also noted that.

Technology

If a homeowners insurance policy offered a website and mobile app that provided convenience because you could make a claim, pay for your premium, or find information about your policy any time you want, then we also put that company on our list.