Earthquake Insurance

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on September 04, 2023

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What Is Earthquake Insurance?

Earthquake insurance is a type of insurance policy that provides coverage for property damage or loss resulting from an earthquake.

Earthquake insurance is designed to protect property owners from the financial burden of repairing or rebuilding their homes or businesses in the aftermath of an earthquake.

Unlike standard homeowner's insurance policies, earthquake insurance is specifically designed to cover the unique risks associated with seismic activity, including structural damage, foundation damage, and damage to personal property.

Earthquake insurance policies may vary in terms of the types of damage they cover, the coverage limits, and the deductibles required.

Individuals who live in areas with a high risk of earthquakes are often advised to consider purchasing earthquake insurance to protect their property and finances in the event of an earthquake.

Types of Earthquake Insurance

There are two primary types of earthquake insurance: comprehensive policies and stand-alone policies.

Comprehensive Policies

  1. Homeowners Insurance: Some homeowners insurance policies may include earthquake coverage as part of their standard offering or as an optional endorsement. It is essential to review your policy to determine if earthquake coverage is included or available as an add-on.

  2. Renters Insurance: Similar to homeowners insurance, some renters insurance policies may offer earthquake coverage as part of their basic coverage or as an optional endorsement. Renters should review their policy and discuss their options with their insurance provider.

Stand-Alone Policies

  1. Dwelling Coverage: This type of policy specifically covers the dwelling structure in the event of an earthquake, including damage to the foundation, walls, and roof.

  2. Personal Property Coverage: This coverage protects your personal belongings inside the home, such as furniture, electronics, and clothing, from earthquake damage.

  3. Loss of Use Coverage: This policy covers additional living expenses incurred if you are temporarily displaced from your home due to earthquake damage.

Types of Earthquake Insurance

Key Components of Earthquake Insurance

Understanding the essential components of an earthquake insurance policy is crucial when evaluating and comparing policies.

Coverage Limits

These are the maximum amounts the insurance company will pay for specific categories of losses, such as dwelling, personal property, and loss of use.

It's essential to ensure your coverage limits are adequate to cover the potential cost of rebuilding or repairing your home and replacing your belongings.


A deductible is the amount you must pay out of pocket before your insurance coverage kicks in. Earthquake insurance policies often have separate, higher deductibles than standard homeowners or renters policies.


Some policies may exclude specific types of damage, such as damage due to landslides or tsunamis triggered by an earthquake. It's essential to understand these exclusions and consider additional coverage if necessary.

Policy Endorsements

These are optional add-ons that can provide additional coverage or modify the terms of your policy. For example, you may be able to purchase coverage for building code upgrades required after an earthquake.

Key Components of Earthquake Insurance

Factors Affecting Earthquake Insurance Premiums

Several factors can influence the cost of earthquake insurance premiums, including:

Geographic Location

The geographic location of your property plays a significant role in determining your premiums, as some areas are more prone to earthquakes than others.

Construction Type and Age of the Building

Homes built with materials and methods that are more resistant to earthquake damage, such as wood framing and shear walls, may have lower premiums. Additionally, newer homes built to modern building codes may be less expensive to insure than older homes.

Foundation Type

Homes with a slab foundation may be less vulnerable to earthquake damage than those with a raised foundation, which could result in lower premiums.

Retrofitting and Mitigation Measures

Taking steps to strengthen your home against earthquake damage, such as retrofitting or installing seismic bracing, can lead to reduced insurance premiums.

Evaluating the Need for Earthquake Insurance

To determine if earthquake insurance is necessary for your situation, consider the following factors:

Assessing Earthquake Risk

  1. Seismic Hazard Maps: Review local seismic hazard maps to understand the potential for earthquake activity in your area.

  2. Fault Proximity: Evaluate your property's proximity to known fault lines, as this can impact your risk of earthquake damage.

  3. Soil and Building Conditions: Consider local soil conditions and the construction quality of your home, as these factors can influence the severity of earthquake damage.

Financial Considerations

  1. Replacement Cost of the Property: Determine the cost to rebuild or repair your home and replace your personal belongings in the event of a significant earthquake.

  2. Personal Financial Situation: Assess your ability to cover the costs of earthquake damage out-of-pocket or through a loan, and weigh that against the cost of earthquake insurance premiums.

How to Purchase Earthquake Insurance

Shopping for Policies

  1. Comparing Quotes: Obtain quotes from multiple insurance providers to find the best coverage and price for your needs.

  2. Researching Providers: Investigate the financial stability and customer service reputation of each insurance provider you're considering.

Tips for Choosing the Right Policy

  1. Understanding Policy Details: Carefully read the policy terms and conditions, including coverage limits, deductibles, exclusions, and endorsements.

  2. Working with an Insurance Agent or Broker: An experienced insurance professional can help you navigate the process of selecting and purchasing the appropriate earthquake insurance policy.

Filing an Earthquake Insurance Claim

Steps to Take Immediately Following an Earthquake

After an earthquake, ensure the safety of your family, assess the damage to your property, and take steps to prevent further damage.

How to Document Damages

Document the damage to your property by taking photos or videos, creating an inventory of damaged items, and collecting any relevant receipts or records.

Navigating the Claims Process

Contact your insurance provider as soon as possible to report the damage and initiate the claims process. Be prepared to provide documentation and cooperate with any investigations or inspections conducted by the insurance company.


Earthquake insurance serves as a crucial financial safety net for homeowners and renters residing in earthquake-prone areas.

It is essential to carefully evaluate personal risk factors, including geographic location, property construction, and financial circumstances, in order to make an informed decision about purchasing the right policy.

By understanding policy details, coverage limits, deductibles, exclusions, and endorsements, you can choose a policy that provides the necessary protection without overburdening your finances.

In addition to evaluating your own needs, it is helpful to work with an experienced insurance professional who can guide you through the process of selecting and purchasing the appropriate earthquake insurance policy.

Having the right coverage in place can provide peace of mind and ensure that you are prepared to face the financial consequences of earthquake damage.

Investing time and effort into understanding and acquiring earthquake insurance can ultimately save you from significant financial loss and provide security for your home and belongings.

Earthquake Insurance FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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