If an earthquake might damage your home to the point where it would have to be completely rebuilt, earthquake insurance is almost certainly a good idea. You’ll need homeowners insurance and flood insurance for that.Īs with any type of insurance, decide whether to get earthquake insurance by weighing the cost of the policy and the coverage it provides against your property’s earthquake risk and your ability to pay for the damage out of pocket. Not a replacement for fire or flood insurance: Earthquake policies don’t cover indirect damage, such as fires or floods caused by earthquakes.You might also have a sublimit for the cost of emergency repairs. Multiple sublimits: You might be limited to $25,000 in coverage for glassware, crystal, china, and porcelain, and another $25,000 for fine art, for example.It also may not cover masonry veneer (such as decorative brick or stonework), swimming pools, fences, landscaping, detached garages, and other detached structures. Incomplete coverage: Your earthquake policy may not cover damage to your land, such as repairs for sinkholes or cracks.You also may have to pay your deductible twice if too much time (e.g., 72 hours) passes between shaking events. Multiple deductibles: You might have to pay one deductible for your home’s structure and another for your possessions, for example.For example, the lowest earthquake deductible available in your area might be 5%, and the highest might be 25%. High deductibles: Earthquake insurance deductibles are usually a percentage of the cost to rebuild your home and can be much higher than homeowners insurance deductibles.It might feel like a lot when you’re already paying for homeowners or renters insurance. Additional premium: Carrying earthquake insurance is an additional expense.Drawbacks of earthquake insuranceĮarthquake insurance comes with some drawbacks: Additional living expenses: Also called loss of use coverage, this pays for costs like hotel bills or rent so you can live elsewhere while your home is being repaired or rebuilt.ĭid you know? In 2021, only 13% of California renters and homeowners carried earthquake insurance.Personal property: This pays to replace personal belongings damaged by shaking.Dwelling: This coverage pays to repair or replace your home’s structure if an earthquake damages or destroys it.Living somewhere else while your home is repaired or rebuiltĮarthquake insurance typically includes the following types of coverage:.Stabilizing the land under your home after a quake. Making building code upgrades to your home when repairing or rebuilding.Repairing or rebuilding your home and detached structures.Whether you own a house or rent an apartment, you must purchase an earthquake endorsement or rider (add-on) for your homeowners policy or a separate earthquake insurance policy to protect yourself against the risk of financial losses from earthquake damage.Įarthquake insurance can help with the following costs: Homeowners insurance doesn’t cover earthquake damage. Is earthquake insurance worth the cost?.Learn more about whether or not earthquake insurance is worth the cost: If you live in an area susceptible to these natural disasters, making earthquake insurance a priority in your budget can be a smart move. Large swaths of the United States face serious earthquake risks, and standard homeowners and renters insurance policies don’t cover them. NMLS # 1681276, is referred to here as "Credible."Ĭalifornia homeowners aren’t the only Americans who need earthquake insurance. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Our goal is to give you the tools and confidence you need to improve your finances.
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