Earthquake Insurance
Definition and meaning of Earthquake Insurance in real estate.
Earthquake insurance is a specialized property insurance policy or policy endorsement that covers damage to a home and personal belongings caused by seismic activity.
In more detail
Standard homeowners insurance policies specifically exclude damage from earthquakes, sinkholes, and earth movements. Homeowners in high-risk zones, such as areas near major fault lines, often purchase this coverage separately or add it as an endorsement to their existing policy. These policies carry unique deductibles that are calculated as a percentage of the home's total insured value rather than a flat dollar amount.
Because earthquake damage can be catastrophic, the coverage can be expensive and may exclude external structures like pools, walkways, and detached garages.
Key facts
| Category | Buying & Selling |
|---|---|
| Excluded by | Standard homeowners insurance policies |
| Deductible type | Percentage of home's replacement cost, typically five to twenty percent |
| Applies to | Properties in seismically active regions |
After buying a home in California, the owner purchased a separate earthquake insurance policy to ensure they could rebuild if a major tremor damaged the home's foundation.
Frequently asked questions
Does earthquake insurance cover damage to land or brick facades?
Many basic policies exclude masonry veneer like brick or stone, and they rarely cover the cost of stabilizing or restoring the land under the home.
Why is the deductible for earthquake insurance so high?
The deductible is high because earthquake damage is often severe and widespread, which presents a high concentration of risk for insurance providers.