Earthquake insurance helps protect your property from damage caused by earthquakes and earth movement, but it comes with important limits you should understand.
Earthquakes can strike without warning, causing serious damage to homes, buildings, and personal property. Standard homeowners or property insurance policies usually do not cover earthquake damage. That’s where earthquake insurance comes in.
What Is Earthquake Insurance?
Earthquake insurance is a type of property coverage that helps pay for losses caused by a sudden shaking or trembling of the earth. This includes damage from natural earthquakes and even earth movement caused by volcanic eruptions.
If an earthquake cracks your foundation, collapses walls, or damages the structure of your building, earthquake insurance can help cover the repairs. Depending on the policy, it may also help replace damaged personal belongings inside the home.
What Earthquake Insurance Covers
Earthquake insurance focuses specifically on damage caused directly by earth movement. Common covered losses include:
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Cracked foundations and walls
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Structural damage to your home or building
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Roof collapse due to shaking
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Damage caused by volcanic earth movement
Many policies include coverage for both the structure and personal property, though these are often listed separately with different limits.
What Earthquake Insurance Does NOT Cover
This is where things often surprise people. Even if an earthquake causes other disasters, earthquake insurance usually excludes certain follow-up events.
Most policies do not cover losses caused by:
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Fire after an earthquake
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Explosions triggered by the quake
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Flooding or tidal waves after shaking
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Tsunamis or water-related damage
For example, if an earthquake breaks a gas line and a fire destroys your home, the earthquake policy typically won’t pay for the fire damage. That loss would fall under a separate fire policy, if covered at all.
Why Earthquake Insurance Is Separate
Earthquakes are considered high-risk, low-frequency events with potentially massive losses. Because of this, insurance companies separate earthquake insurance from standard property coverage to manage risk more carefully.
This separation allows homeowners and businesses in lower-risk areas to avoid paying for coverage they may not need, while giving high-risk areas the option to buy extra protection.
A Real-Life Example
Imagine you live near a fault line and own a home worth $300,000. A strong earthquake hits and causes major foundation damage, making the house unsafe.
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Homeowners insurance: no coverage for earthquake damage
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Earthquake insurance: helps pay for structural repairs
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Fire after the quake: not covered by earthquake insurance
Without earthquake insurance, the repair costs would come entirely out of pocket.
Deductibles Are Usually Higher
One important thing to know is that earthquake insurance often comes with high deductibles, sometimes 10–25% of the insured value. That means you may need to pay a significant amount before coverage kicks in.
However, even with a high deductible, earthquake insurance can still save you from devastating financial loss.
Who Should Consider Earthquake Insurance?
Earthquake insurance is especially important if:
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You live in an earthquake-prone area
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Your home is older or not earthquake-resistant
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You own valuable property in high-risk regions
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You want financial protection from sudden structural damage
Even areas not known for major earthquakes can experience unexpected earth movement, making coverage worth evaluating.
Earthquake Insurance for Renters and Businesses
Renters can also buy earthquake insurance to protect personal belongings, even if they don’t own the building. Businesses often carry earthquake coverage to protect buildings, equipment, and business assets that could be destroyed by earth movement.
Final Thoughts
Earthquake insurance provides property coverage for damage caused by sudden shaking of the earth, including volcanic activity. While it does not cover fire, flood, or explosion losses that follow an earthquake, it can be essential protection in the right location.
Understanding what earthquake insurance covers—and what it doesn’t—helps you decide whether the added cost is worth the peace of mind it offers when the ground starts to shake.
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