Earthquake insurance
Earthquake insurance is a separate policy, or an endorsement to a homeowners, renters, condo or commercial property policy, that pays for covered earthquake damage to your building, other structures, belongings and sometimes extra living costs. Standard policies generally exclude earthquake shaking, and this coverage usually carries a percentage deductible.
Also called: earthquake coverage, earthquake, commercial earthquake insurance
If your home or belongings are damaged by earthquake shaking, a standard homeowners, renters or condo policy generally will not pay; earthquake insurance is the coverage that does. It comes as an endorsement or a separate policy, with its own limits for the dwelling, other structures, personal property and living expenses. The biggest difference from your regular policy is the deductible: usually a percentage of the coverage limit, which can mean tens of thousands of dollars before payments begin.
How an earthquake claim pays out
Each coverage category usually carries its own limit and its own percentage deductible, so the math runs line by line. The NAIC consumer guide to earthquake insurance (opens in a new tab) works through a policy with a $100,000 dwelling limit, a $10,000 limit for outside structures, a $50,000 personal property limit and a 20% deductible on each.
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| Coverage | Limit | Damage | Deductible (20% of limit) | Insurer pays |
|---|---|---|---|---|
| Dwelling | $100,000 | $110,000 | $20,000 | $90,000 |
| Outside structures | $10,000 | $8,500 | $2,000 | $6,500 |
| Personal property | $50,000 | $62,000 | $10,000 | $50,000 (capped at the limit) |
| Total | $180,500 | $32,000 | $146,500 |
For personal property, $62,000 minus $10,000 would be $52,000, but the $50,000 limit caps the payment. Of the $180,500 total loss, the policyholder carries $34,000: the $32,000 in deductibles plus $2,000 of belongings above the limit. These figures are an illustration, not an average claim or a quote.
Choices that change the payout and the premium
The deductible is the largest lever. Earthquake deductibles are usually 10% to 20% of the coverage limit, according to the NAIC (opens in a new tab), and they can range from 10% to 25% of the structure's replacement value, according to the New York Department of Financial Services (opens in a new tab). On a $200,000 dwelling limit, 10% to 20% equals $20,000 to $40,000. A higher deductible generally lowers the premium and raises your share of a claim.
Limits come next. The dwelling limit is usually the same one shown on your homeowners insurance policy, but it should match what rebuilding would cost; our guide on how much homeowners insurance you need covers setting that number. Other structures, such as a detached garage or fence, and personal property coverage may have separate limits and deductibles. Additional living expenses, also called loss of use, can pay extra rent and lodging while a covered home is repaired, though not ordinary groceries, mortgage payments or car payments.
How property is valued matters too. Replacement cost pays to repair or replace with materials of similar kind and quality, while actual cash value subtracts age and wear and can pay less. Some policies add building-code upgrade coverage or pay part of the cost to stabilize land under the home. Premiums reflect location, age, construction, number of stories, foundation, masonry veneer, rebuilding cost and the deductible you choose.
Aftershocks follow the policy's event period. Policies typically treat earthquake activity within 72 hours as one event, with one claim and one set of deductibles, according to the NAIC (opens in a new tab), so later damage can mean a second claim and a second deductible.
Where you see earthquake coverage
The term appears mainly in property insurance: as an endorsement or separate policy alongside homeowners coverage, in renters coverage for belongings and possibly loss of use, in condo unit-owner coverage for belongings, improvements and possibly loss assessments, and in commercial property policies. Earthquake damage to a car falls under auto comprehensive coverage rather than residential earthquake insurance.
You meet it on a quote, binder, declarations page, endorsement schedule, renewal notice or claim letter, and the declarations page lists the limits and deductibles that apply. Exclusions matter because earthquake policies commonly exclude or limit land damage, vehicles, flood, external water damage, pre-existing damage and some masonry veneer. Fire after an earthquake usually goes to the homeowners policy when fire is a covered peril.
How Connecticut and New York handle it
Neither state requires homeowners, renters or condo owners to buy earthquake coverage. Connecticut permits insurers to cover "loss or damage by ... earthquake" under Conn. Gen. Stat. § 38a-305 (opens in a new tab), and earthquake is an exclusion in a typical homeowners or renters policy there, according to the Connecticut Insurance Department (opens in a new tab). Renters can find more in our Connecticut renters insurance guide.
New York property insurers are not required to offer earthquake coverage, according to the New York Department of Financial Services (opens in a new tab). When a declared natural disaster includes an earthquake, N.Y. Insurance Law § 2618 (opens in a new tab) requires covered insurers to acknowledge claims in writing, inspect under applicable regulations and, after receiving a properly executed proof of loss and requested materials, tell you in writing within 15 business days whether a noncommercial claim is accepted or rejected.
Questions to ask your agent or insurer
- Does my current homeowners, renters, condo or commercial policy exclude earthquake, and would new coverage be an endorsement or a separate policy? The form decides whether shaking damage is insured and which contract controls the claim.
- What are the limits and deductibles for the dwelling, other structures, personal property and additional living expenses? Separate limits and percentage deductibles change what is payable in each category.
- Is the property covered at replacement cost or actual cash value, and is the dwelling limit enough to rebuild? Actual cash value subtracts age and wear, and a low dwelling limit can leave a rebuild short.
- What damage is excluded, including fire, flood, external water, land movement, masonry veneer, vehicles and pre-existing damage? Another policy may handle some of those losses.
- What event period applies to aftershocks, and when would a second deductible apply? The policy wording, not a general rule, sets that window.
Frequently asked questions
These come up when people first look at an earthquake quote.
Can I buy earthquake insurance right after a quake?
Coverage cannot pay for damage that already happened. After an earthquake, insurers may temporarily stop selling coverage or charge higher premiums when sales resume, according to the NAIC (opens in a new tab).
Does earthquake insurance cover renters and condo owners?
It can. Renters may buy coverage for belongings and additional living expenses, and condo owners may cover belongings, unit interests, loss of use and certain assessments, depending on the policy, according to the California Department of Insurance (opens in a new tab).
Is one deductible applied to the whole claim?
Not necessarily. Policies may apply separate deductibles to the dwelling, other structures and personal property, so ask how each is calculated.
How is California different?
California homeowners insurers must offer earthquake coverage in writing every other year, stating limits, deductible and premium, and you have 30 days from mailing to accept, according to the California Department of Insurance (opens in a new tab). Those rules apply only in California.