What Does Earthquake Insurance Cover and How Does It Work

Earthquake insurance can be a lifesaver for homeowners who live in earthquake-prone areas. It's designed to help you rebuild and recover financially after an earthquake.

Typically, earthquake insurance covers damage to your home and its contents, including your personal belongings. This can include furniture, electronics, and other valuables.

The policy usually has a deductible, which is the amount you pay out of pocket before the insurance kicks in. For example, if your deductible is $10,000 and the damage is $50,000, you'll pay the first $10,000 and the insurance will cover the remaining $40,000.

Earthquake insurance can also cover additional living expenses, such as temporary housing and food, if you're unable to live in your home while it's being repaired.

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If you rent, you're not off the hook for earthquake insurance concerns. You can buy earthquake insurance to cover damage to your belongings. This type of insurance can also pay for living somewhere else while your rented home is being repaired.

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Your dwelling coverage, also known as Coverage A, is the main part of basic earthquake coverage. This covers your home up to a certain amount, called the limit, which is the same as the limit on your homeowners insurance.

The California Earthquake Authority (CEA) offers deductibles of 5%, 10%, 15%, 20%, and 25% for earthquake insurance. However, there are two exceptions: landscaping, pools, fences, masonry, and separate buildings are not covered.

CEA insurance does not cover separate buildings, which includes structures like garages, sheds, or guest houses. If you rent from someone else or own a condo, you do not need this coverage.

The limit for your dwelling coverage is the same as the limit on your homeowners insurance, which can vary depending on your policy.

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If you're a condo unit owner, your HOA may not cover earthquake damage to common areas and exterior structures. Your association may require you to pay part of their policy deductible through an assessment.

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CEA condo unit policies provide up to $100,000 for your share of certain assessments if your association imposes an assessment for covered damage caused by an earthquake.

You can buy earthquake insurance to cover damage to your belongings and pay for living somewhere else while your condo is being repaired. This type of insurance can also help pay for your condo association assessment to repair your building.

Dwelling coverage may provide coverage for extended structures like a swimming pool or garage, but it's essential to understand what's spelled out in your policy.

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Most earthquake insurance policies provide three forms of coverage: Dwelling coverage, personal property coverage, and loss of use coverage.

Dwelling coverage kicks in to cover repairs or reconstruction if your home becomes damaged due to an earthquake. This coverage may also provide coverage for extended structures, like a swimming pool or garage, but it's essential to understand what's spelled out in your policy.

Some policies may offer a rider that provides "building code upgrade coverage", which would provide additional coverage to rebuild your home after an earthquake to meet current building code requirements.

Here are some specific things that are and aren't covered under earthquake insurance:

Understanding your deductible is an essential part of knowing what to expect from your insurance policy.

The deductible is the part of your insured damages that you pay, before your insurance pays anything. This means you'll need to cover a certain amount out of pocket before your insurance kicks in to cover the rest.

A deductible is not a one-time payment, but rather an annual amount that you'll need to pay each time you file a claim. For example, if your deductible is $500 and you file a claim for $2,000, you'll need to pay the $500 deductible before your insurance pays the remaining $1,500.

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Earthquakes can cause significant damage to your home, and it's essential to know what's covered under your insurance policy. Most homeowners and renters insurance policies do not cover earthquake damage.

If you live in a state with a higher risk of earthquakes, you may consider getting earthquake insurance to protect your property. Earthquake insurance policies provide three forms of coverage: Dwelling coverage, personal property coverage, and loss of use coverage.

Dwelling coverage kicks in to cover repairs or reconstruction if your home becomes damaged due to an earthquake. This coverage may also provide coverage for extended structures, like a swimming pool or garage.

Personal property coverage protects your belongings inside the home, but it's essential to understand what's spelled out in your policy. Some policies may have limitations or exclusions, so it's crucial to review your policy carefully.

Loss of use coverage helps you afford a new place to stay, such as a hotel, if an earthquake causes extensive damage to your home to the point that you can no longer safely use it.

Here's a summary of what's covered under earthquake insurance:

If you're a condo unit owner, your HOA may have insurance for common areas and the exterior structure of the building, but it may not cover earthquake damage to those common areas and exterior structures. Some policies, like CEA condo unit policies, provide up to $100,000 for your share of certain assessments if your association imposes an assessment for covered damage caused by an earthquake.

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Earthquake insurance can provide a financial safety net in case of a disaster.

You'll be relieved to know that earthquake insurance can cover the cost of temporary housing if your home becomes uninhabitable due to earthquake damage.

In some cases, earthquake insurance may also cover the cost of debris removal and cleanup.

This can be a huge weight off your shoulders, especially if you're already dealing with the stress of a natural disaster.

Earthquake insurance can also cover the cost of alternative living arrangements, such as a hotel or rental property, while your home is being repaired or rebuilt.

Earthquake insurance is a type of coverage that can help protect your home and belongings from damage caused by earthquakes. The California Earthquake Authority (CEA) offers basic earthquake coverage with three main parts: dwelling coverage, personal property coverage, and additional living expenses (ALE) coverage.

Dwelling coverage is the most basic part of earthquake insurance, covering your home up to a certain amount, called the limit. This limit is the same as the limit on your homeowners insurance. You can choose from various deductibles, ranging from 5% to 25% of your home's value.

If you rent or own a condo, you might not need dwelling coverage, as it's not required in those situations. However, if you do need it, be aware that CEA insurance doesn't cover landscaping, pools, fences, masonry, or separate buildings.

Additional living expenses (ALE) coverage, also known as Coverage D, helps cover temporary and extra costs to live somewhere else while your area is evacuated or your home is repaired. This coverage can include temporary rental of a home, apartment, or hotel room; restaurant meals; a temporary telephone line; moving and storage; furniture rental; and laundry.

Here's a breakdown of the types of coverage you can expect from earthquake insurance:

In the event of an earthquake, you'll need to submit a claim to your carrier, pay out of pocket to cover your deductible, and then your policy will kick in to cover the remainder (up to your policy limits).

Earthquakes can happen in all 50 states and U.S. territories, so it's essential to ask yourself if you have the right coverage. Most homeowners and renters insurance policies do not cover earthquake damage.

A home is usually a person's biggest asset, and earthquakes can cause a great deal of damage that isn't covered under your Homeowner's, Renter's, or Condominium policy. However, some comprehensive Mobile Homeowner's policies do cover earth movement.

Some specific things that are usually not covered under standard policies include damage to masonry, such as brick, stone, or rock on your home's exterior. And, damage to vehicles is covered by comprehensive coverage as part of your auto insurance.

However, fire damage from a blaze caused by an earthquake is covered by your homeowners policy. And, flood damage from a flood caused by an earthquake requires a separate flood insurance policy.

To get an idea of what's covered and what's not, consider the following:

It's also worth noting that you may be able to purchase a rider that provides “building code upgrade coverage,” which would provide additional coverage to rebuild your home after an earthquake in order to meet current building code requirements.