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Is Damage-From-Earthquake Clause Included In A General Home Insurance Policy

Is Damage-From-Earthquake Clause Included In A General Home Insurance Policy

Bob The Broker
Bob Friel
Published on March 5, 2024

Is Damage-From-Earthquake Clause Included In A General Home Insurance Policy

Earthquake Insurance
Natural disasters such as floods, tornados, hurricanes, earthquakes, and wildfires can severely destroy or damage your home. Whether, as a homeowner, your home insurance policy covers the damage or not largely depends on the type of policy you have.

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Typically, a general home insurance policy covers specific natural disasters. These include wildfires, ice and deep freezes, wind and hail, volcanic eruption, damage from hurricanes (except in coastal areas), and falling objects such as tree branches.

Whenever you take out a homeowners insurance policy, take some time off to go through the fine print in detail. You will know what is covered to avoid unpleasant surprises if you submit a claim later.

Flood damage and earthquakes are not covered under a homeowner's insurance. If you want either or both in your policy, these must be bought on top of the general policy.

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In California which is an earthquake-prone state, an earthquake house insurance can be purchased from an insurance company that is a member of the California Earthquake Authority. Earthquake insurance costs about $850 a year. This though is flexible and the ultimate amount depends on the value, location, building materials used, and the age of your home.

Even though home insurance does not cover earthquakes, there is an exception to it. You can claim for damages if an earthquake starts a fire in your home. Since home insurance covers fire, you can claim for fire damages. Even your additional living expenses would be paid if you have to move out during the repair work.

Is A Standalone Earthquake Insurance Worth It

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Understandably, you would want to protect your home from all types of disasters, regardless of whether it is included in a general home insurance policy or not. However, before going for a standalone earthquake house insurance, evaluate whether paying the extra premium is worth it.

Earthquake coverage is not mandatory under law but if an earthquake destroyed your home and you do not have coverage, the financial implications can be devastating for you and your family. Check whether you live in a high-risk earthquake-prone zone. If not, the cost of an added earthquake insurance endorsement or getting an altogether new earthquake house insurance will probably not be worth it.

If you have any doubts in this regard and want an expert opinion on what to do, contact our insurance experts at FGM. We will give you a clear view of whether you should opt for earthquake insurance, the cost of doing so, and what will be the extent of coverage.
Insurance Policy
What Is The Extent Of Coverage of An Earthquake Insurance

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Just as standalone and standard insurance coverage for natural disasters works, similar is the endorsement or separate policy for earthquake home insurance. It covers claims for personal property damaged by an earthquake, home replacement cost if destroyed, structural damage or weakening of the house, and temporary living expenses if displaced.

Some earthquake insurances cover damage from aftershocks that happen within 72 hours.

How Does Home Insurance For Earthquakes Work?

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Just as in a typical home insurance policy, an earthquake insurance policy also has deductibles, conditions, and coverage limits. You might be faced with different coverage types depending on the type of structure like dwelling coverage, loss of use coverage, and personal property coverage. For any other structure on your property, verify with your insurer how their coverage works.

Earthquake home insurance deductibles are not standardized but vary by insurer. You could either set a dollar amount or a percentage of the structure's coverage limits of your homeowner's dwelling. This percentage usually falls between 5% to 25%. When you make a claim, the deductible will simply be subtracted from the sanctioned amount.

When taking out an earthquake insurance policy, ensure that the dwelling coverage limit is equal to the amount that would be required to rebuild the house to its previous standard and not its present market value. The homeowner's policy limit for dwelling coverage (Coverage A) and the coverage against earthquakes must be the same. The type of foundation, the age of the house, the building materials used, and the location can all influence the amount or premium to be paid for your earthquake house insurance.

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Where Do I Buy Home Insurance for Earthquakes

To know more about where to get the best terms for your earthquake home insurance, get in touch with us at FGM. Our insurance professionals will advise you on where to get the perfect match for your needs and the cost of doing so.

You can also inquire with your present homeowner insurers if they provide any options for earthquake coverage. Though coverage for seismic damage is not included in the base home insurance policy, insurers may offer coverage through an additional endorsement against earthquakes. Alternatively, you can also buy a standalone earthquake policy.

Give FGM a call today for more information on earthquake house insurance.

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Bob Friel Bob The Broker
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