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About Earthquake Insurance

Homeowners and renters insurance policies don’t cover earthquake damage. Unless you purchase earthquake insurance, you should plan to pay for all of your own after-earthquake recovery costs, from repairing damage and replacing belongings, to temporary housing costs while your home is repaired or rebuilt. 

Types of Earthquake Insurance

1

Conventional (indemnity) earthquake insurance. 

This kind of insurance is offered by private insurance companies and, in California, by the California Earthquake Authority. It can be purchased as an addition (endorsement) to a homeowners or renters policy. Some companies also offer earthquake insurance as a separate, stand-alone policy. This type of insurance is most useful in disaster events that result in significant damage and loss. Policies include a deductible, and payment of a claim follows a claim adjustment process.

2

Parametric earthquake insurance. 

This kind of earthquake insurance is currently available in only a few states. It is designed to pay policyholders a fixed lump sum quickly to cover immediate needs after an earthquake. Payout does not depend on a claim or require a claim adjustment process. Instead, the payout is triggered automatically if the policyholder’s insured property is within the geographical area where a qualifying earthquake event occurs. This determination is based on seismic data from an independent authority. Monthly premiums for parametric earthquake insurance are comparatively low, and the payout to individual policyholders is correspondingly modest (e.g., $10,000). This insurance is intended to cover short-term recovery expenses, rather than significant damage and loss.

Learn more about parametric disaster insurance (United Policyholders).

3

Flood insurance for tsunami zones.

Most standard homeowners and renters policies don’t include coverage for flood damage. If you live in a tsunami inundation zone, consider purchasing flood insurance.

Learn more about flood insurance.  

Conventional Earthquake Insurance Q&A

A written inventory, along with photographs or a video of your property, can help you prove damage or loss when you make a claim. Document your property when you purchase an insurance policy; update it whenever you buy new items. How to Create a Home Inventory. Try the NAIC Home Inventory App.

Earthquake insurance policies come with a deductible, which is the amount that you, the policyholder, will be responsible for paying on each claim. Deductibles for earthquake insurance are calculated based on a percentage of the insured value of your property, rather than set as a dollar amount. Deductibles differ depending on the insurance company and policy, so before you purchase a policy, be sure to ask your agent to explain what your options are, how the deductible works, and how it will be calculated. The higher the deductible, the lower your premium will be; but a high deductible means you’ll be responsible for paying more out of your own pocket to repair damage and replace belongings after an earthquake.

Understanding Your Insurance Deductibles, by the Insurance Information Institute.

The cost of a policy depends on a number of factors, including the earthquake hazard in your area, where you live in relation to the fault, the age of your home, the type of construction and foundation, and what the policy’s deductible is. Seismic retrofitting to improve your home’s resistance to earthquake damage may lower the cost of the premium. Policies for renters cost less than homeowners policies. Contact an insurance agent to discover your options and get an estimate. If you live in California, check out CEA’s online premium calculator. 

Even if the property owner has earthquake coverage, it won’t cover a renter’s belongings. As a renter, you’ll need your own earthquake insurance policy to cover the cost of replacing or repairing damaged belongings. Your policy could also cover the cost of your living expenses if the earthquake damages the building and you have to leave.

Typically, an earthquake insurance policy will cover:

  • Direct damage to the structure and attached structures (such as a garage).
  • Items of personal property inside the house, such as furnishings, clothing, and electronics).
  • Loss of use (rent, food, moving and storage expenses).
  • Emergency repairs, to prevent further damage (such as from rain water) until permanent repairs can be made.
  • What is my deductible and how does it work?
  • Will my earthquake insurance policy cover the cost of rebuilding to current code after the earthquake? (Ask your agent about building code upgrade coverage.)
  • Will my earthquake insurance policy cover fragile breakables such as china and glassware? (You may need to purchase additional coverage for such items.)
  • What does my earthquake insurance policy exclude? (For example, you may need additional coverage for certain features, such as decorative masonry veneer on the exterior of the house.)

Explore & Learn More

Earthquake Insurance Info Online

Looking for more information about earthquake insurance? Ask an insurance agent or broker, contact your state/territory’s insurance department, and checkout the following online resources.

States / Territories with Information Online (Western Region)

California
California Earthquake Authority CEA.

California Department of Insurance

Earthquake resources page EQ resources.
Earthquake insurance flipbook Flipbook.
Earthquake insurance brochure Brochure.
Earthquake insurance mediation page Mediation.

Earthquake Country Alliance:

Seven Steps to Earthquake Safety 7 Steps.
Regional Earthquake Safety Booklets booklets.
United Policyholders: Earthquake Insurance Buying Tips View.
Hawaii
Homeowner’s Handbook to Prepare for Natural Disasters View.
My Insurance Doesn’t Cover What?  CCA.
Idaho
Idaho Office of Insurance Commissioner: Disasters page View.
Montana
List of Licensed Montana Insurance Agencies who offer Flood, Earthquake and Landslide Coverage View.
Nevada

Nevada Division of Insurance:

Earthquake Insurance page View.
Nevada Consumer’s Guide to Earthquake Insurance View.
Oregon

Oregon Division of Financial Regulation:

Earthquake Insurance web page
A Consumer’s Guide to Earthquake Insurance PDF
Prepare Now: Disaster Preparedness web page
Utah

Utah Insurance Department:

Earthquake Insurance page  EQ-insurance page.
Difference in Condition (DIC) Policies page DIC policies.
Earthquakes in Utah: Damages and Insurance (FAQs) View.
Washington
Washington State Office of the Insurance Commissioner: Earthquake Insurance page View.
Washington Emergency Management Division: Earthquake insurance information sheet Info-sheet.
Central United States Earthquake Consortium (CUSEC): Earthquake insurance page
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