As earthquakes are becoming more frequent, we thought it would be beneficial to share some insights into earthquakes and insurance.  An earthquake, at least for insurance purposes, is defined as a sudden and rapid shaking of the earth caused by the shifting of the earth’s crust below the earth’s surface.

A standard homeowners’ insurance policy does not cover earthquakes.  Coverage must usually be purchased via an endorsement or on a separate policy.  Additionally, according to the U.S. Geological Survey, the U.S. experiences approximately 20,000 earthquakes per year.

As development increases in seismically active areas, so does the risk for loss when an earthquake hits.   In July 2024, the U.S. Geological Survey updated its U.S. National Seismic Hazard Maps. The new maps reflect the best and most current understanding of where future earthquakes are likely to occur, how frequently they are expected to happen, and how strongly the ground is likely to shake as a result.

The new maps show that 42 states are at risk, with 16 states that have experienced earthquakes with a magnitude of six or greater, which are considered high-risk.

Earthquake hazard is exceptionally high on the West Coast, the Intermountain West, and in several active regions of the central and eastern U.S.

EARTHQUAKE INSURANCE COVERAGE

As there are no national earthquake programs, coverage is usually purchased through a private insurance company.  (However, some states, like California, have put together state programs.)

  1. Private Insurance Company: Like with flood insurance, several insurance companies have put together programs for earthquake insurance, which you can purchase separately or in conjunction with flood and landslide coverage. Homeowner’s Policy.  In some states, you can actually purchase earthquake coverage through your homeowners’ insurance policy.

Items to Note:

    • Your deductible is almost always a percentage of the coverage limit (typically 5%).
    • Pay special attention to your policy if you purchase earthquake coverage through your homeowners insurance company.   While you will have coverage for earthquakes, your policy will most likely exclude all other land movement-related events, including landslides/mudslides.

To learn more about earthquake insurance, please get in touch with our office.