Just like flooding, earthquake damage is excluded from standard homeowners insurance. If a quake cracks your foundation, brings down your chimney, or destroys your home entirely, your regular policy will not pay.
Earthquake insurance is a separate policy or endorsement that covers structural damage and personal belongings from seismic events. It’s essential in some states, optional in others, and frequently misunderstood everywhere.
This guide explains what earthquake insurance covers, what it costs, and how to decide whether you need it.
Why Earthquake Damage Is Excluded
Earthquake damage is excluded from standard homeowners and renters insurance for the same reason flood damage is: insurers consider these catastrophic perils that would generate too many simultaneous claims to be profitable if included in basic policies.
When a major earthquake hits a populated region, thousands of homes can be damaged at once. To stay solvent, insurers either exclude the peril entirely or sell coverage for it separately at a higher price.
What Earthquake Insurance Covers
A standard earthquake policy typically covers:
- Dwelling: Structural damage to your home — foundation, walls, roof, chimney, attached structures
- Personal property: Belongings inside the home damaged by the quake (furniture, electronics, clothing)
- Loss of use: Additional living expenses if you can’t live in your home while it’s being repaired
- Other structures: Detached garages, sheds, and fences (often subject to separate limits)
- Building code upgrades: Costs of rebuilding to current code, which is often more stringent than the code your home was built to
What It Doesn’t Cover
Even with earthquake insurance, there are common exclusions:
- Fire damage caused by the quake (your standard home policy covers this)
- Damage to vehicles (auto comprehensive coverage)
- Water damage from broken pipes (sometimes covered, sometimes not — check your policy)
- Landscaping, swimming pools, and outdoor features
- Damage to homes that were already structurally compromised
- Damage from related events (tsunamis, sinkholes, landslides) — some policies include, some exclude
The Deductible Problem
Earthquake insurance deductibles are unusually high — 10% to 25% of your dwelling coverage limit, not a fixed dollar amount.
On a $400,000 home with a 15% earthquake deductible, you would pay the first $60,000 out of pocket before the policy paid anything.
Because of this, earthquake insurance is most useful for protecting against catastrophic, total-loss-level damage — not minor cracks or chimney repairs. Most homeowners with earthquake insurance never file a claim. The policy is there for the one event that destroys the house entirely.
What It Costs
Earthquake insurance costs vary dramatically by location, home age, construction type, and proximity to known fault lines. Rough annual ranges:
- California (high-risk): $800 – $4,000+ for a typical single-family home, depending on location and home characteristics
- Pacific Northwest (Oregon, Washington): $300 – $1,500
- Central/Midwest (New Madrid fault zone): $100 – $800
- East Coast (lower risk): $50 – $300
Older homes (especially pre-1980 wood-frame and unreinforced masonry) cost more to insure. Newer homes built to modern seismic codes cost less.
How to Get Earthquake Coverage
Most people get earthquake insurance one of two ways:
- Endorsement on your existing homeowners policy: Many home insurers offer earthquake coverage as an add-on. Convenient but may have lower limits.
- Standalone earthquake policy: In California, the California Earthquake Authority (CEA) is the primary source, sold through participating insurers. Other high-risk states have similar programs.
Renters can also buy earthquake insurance to cover personal belongings. This is much cheaper than homeowner coverage because it doesn’t include structural damage.
Who Needs Earthquake Insurance?
Whether you need earthquake insurance depends on geographic risk, home construction, and your financial situation:
- High risk (consider strongly): California, Oregon, Washington, Alaska, Hawaii, parts of Nevada, Utah, the New Madrid Seismic Zone (parts of MO, AR, TN, KY, IL)
- Moderate risk (depends on local geology): Parts of South Carolina, New England, the Intermountain West
- Low risk (generally not needed): Most of the Midwest, Gulf Coast, and Florida
Even in high-risk areas, only about 10-15% of homeowners actually carry earthquake insurance. The high cost and high deductibles mean many people gamble against it. Whether that’s the right call depends on:
- Whether you could afford to rebuild without the insurance
- Whether your mortgage lender requires it (some do in high-risk areas)
- How much equity you have in the home — the more you’d lose, the more valuable the protection
- Your home’s age and construction type (older masonry = highest risk)
Steps to Reduce Risk and Premiums
Whether or not you buy earthquake insurance, structural mitigation reduces both your risk and your potential premium:
- Bolt your home to its foundation. Many older homes weren’t properly anchored.
- Brace cripple walls. Short walls in the crawl space between foundation and floor are the most common failure point.
- Strap your water heater. Falling water heaters are a major fire risk after quakes.
- Reinforce or remove unreinforced chimneys.
- Secure heavy furniture, TVs, and bookcases.
- Have a flexible gas shutoff valve installed. Earthquake-triggered gas leaks cause many post-quake fires.
Some states and insurers offer premium discounts of 10-25% for documented retrofits. California’s Brace + Bolt program offers grants to help cover retrofit costs.
Further Reading
- Homeowners Insurance Explained
- Flood Insurance Explained
- Renters Insurance Explained
- How to Shop for Insurance
- Homeowners Insurance for Older Homes
- How to File an Insurance Claim
This article is for general educational purposes only and does not constitute insurance advice. Earthquake insurance availability, coverage terms, deductibles, and rates vary by state, insurer, home characteristics, and proximity to known faults. Consult a licensed insurance agent or your state insurance department for guidance on your specific situation.