Earthquake insurance

Earthquake insurance is a property insurance policy that covers damage caused by earthquakes and certain other forms of earth movement.

A living room in disarray after an earthquake

What is earthquake insurance?

Earthquake insurance is designed to cover costs to repair damages caused by an earthquake and other forms of earth movement, such as aftershocks, tremors, and soil liquefaction. The exact details of your coverage depends on your insurer and state, but most policies or endorsements cover:

Some earthquake insurance policies offer coverage for things like debris removal and emergency repairs to save your home from further damage. You may be able to find coverage designed for condo owners who may be asked to pay a loss assessment to repair costs for shared living spaces in the wake of an earthquake.

What’s not covered by earthquake insurance?

Although earthquake insurance can offer expansive coverage, it can’t cover all types of damage. For example, earthquake policies don’t usually cover vehicle damage caused by an earthquake. You may not have coverage for other types of damage as well, including:

  • Floods that occur as a result of an earthquake.

  • Damage to your property or landscaping (although some plans include "engineering coverage" to stabilize land that supports your home in the wake of an earthquake).

  • Damage to your fence, pool, or high-value collectibles.

  • Cosmetic damage caused by an earthquake.

Keep in mind that the details of an earthquake insurance policy’s coverage depend on the plan and provider you choose. If the first plan you look at doesn’t include all of the types of coverage you want, another one might. This is why it’s always worth comparing several quotes while shopping for earthquake insurance.

Is earthquake insurance worth it?

Standard home insurance policies exclude damage caused by earth movement, so you may want earthquake coverage if you live in an area that’s prone to earthquakes.

How can you determine whether you live in a high-risk area? Unfortunately, earthquakes are unpredictable, and small earthquakes can occur anywhere in the world. However, you can check out your seismic hazard level using FEMA’s earthquake hazard maps.

You should note, however, that seismic hazard is not the same as seismic risk. Seismic hazard describes the events an earthquake causes, and those events’ potential to cause harm. Seismic risk describes the chances for people and property to experience damage based on their vulnerability and exposure to seismic hazard.

For example, you probably have higher risk if you’re in a densely populated area. The more potential there is for materials to shake loose, the more potential there is for those materials to damage your home and your stuff.

But the resilience of the buildings and structures around you also matters. Generally, newer buildings tend to be built to stricter earthquake codes (also known as seismic building codes) than older buildings, making them more secure in the event of a quake.

Once you determine the degree of earthquake risk you face, then you need to decide if earthquake insurance is right for you. You might want to ask yourself these questions:

  • Can you afford earthquake insurance?

  • Can you afford to rebuild your home after an earthquake?

  • Can you afford additional housing expenses if an earthquake makes your home unlivable?

  • Can you afford your mortgage and property taxes in addition to a second place to live?

The takeaway: Earthquake insurance may be expensive, but it’s almost certainly less expensive than rebuilding after an earthquake without insurance.


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