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Earthquake Insurance

You don't need to experience an earthquake firsthand to understand the destruction it brings: cracked foundations, busted windows, and, in extreme cases, homes reduced to rubble. But many people think so long as their house isn't along a fault line, quakes aren't a risk.

The reality? The West Coast doesn't have a monopoly on earthquakes. In fact, one of the biggest quakes in the United States struck New Madrid, Missouri, according to the US Geological Survey.

So regardless of where you live, earthquake insurance may make sense — especially when you consider its protection isn't limited to quake damage alone.

What Is Earthquake Insurance?

Most homeowners insurance policies don't offer earthquake coverage, but you can add it on as an endorsement. In addition to property repair costs, some earthquake policies may pay for:

  • Temporary housing when a quake forces you to relocate.
  • Debris removal so you can get your life back on track quicker.
  • Land stabilization if a quake or landslide destroys the ground under your structure.
  • Earthquake
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  • Landslide
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  • Sinkhole
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Of course, there are some limitations. For example, if an earthquake causes a fire that destroys your property, that's a job for your homeowners insurance, not your earthquake policy. Earthquake insurance also typically excludes coverage for:

  • Vehicles.
  • Water damage.
  • Detached structures.

An easy way to keep your cool while sorting through your coverage options? Work with so you can compare policies and rates side by side.

Why Would I Buy Earthquake Insurance If I'm Not on the West Coast?

The West Coast isn't the only area with earth movement risk. The US Geological Survey (USGS) updated its seismic risk maps to show 42 states have moderate to high seismic activity.

Now consider that 16 states — including Tennessee, Missouri, and South Carolina — have experienced a quake with a 6.0 or greater magnitude. Add in the places where sinkholes do the most damage — according to the USGS, that's Florida, Texas, Alabama, Kentucky, and Pennsylvania — and you just might find yourself in an at-risk area after all.

If that's the case, you'll be glad you had the foresight to invest in earthquake coverage, which can spare you hundreds of thousands of dollars after one of these events wrecks your home.

42 states have moderate to high seismic activity.

But Isn't Earthquake Insurance Ridiculously Expensive?

For many areas, no. High-risk zones naturally fetch a higher premium, but even then, the most expensive policy is still more affordable than rebuilding an uninsured home razed by a quake.

No matter where you live, you have some control over insurance costs. For example, comparison-shopping for your coverage ensures you get the best deal, and you stand to save even more if you quakeproof your house before you buy insurance. Insurance providers may offer homeowners lower premiums if they…

  • Bolt their foundations to the bedrock.
  • Strap their water heaters to the wall.
  • Install gas shut-off valves.
  • Reinforce their houses' frames.
Quakeproofing your home may make earthquake insurance more affordable.

So If I Quakeproof My House, I Don't Need Earthquake Insurance?

No amount of reinforcement makes a home truly "quakeproof." You can bolt your house to the ground for extra protection, but a strong quake could conceivably shake it off its foundation. That said, you have to weigh your risk against what you might lose and what you can afford.

For example, say you live in a high-risk zone. If you take all kinds of precautions to reduce your risk and you have no equity in your home, earthquake insurance may seem like overkill, especially if the deductible is around 10 to 15 percent of your home's value.

But if a big quake strikes, you still stand to lose quite a bit if you don't have coverage. No equity in your house may mean you can walk away from a home that's uninhabitable, but remember your credit will take a major hit. You may have a hard time getting another home loan for many years.

So if being a homeowner is important to you, the investment in insurance may be worthwhile.

Even the highest earthquake insurance deductible is a fraction of the cost of a new home.

Doesn't the High Deductible Mean Earthquake Insurance Won't Pay Out When I Need It?

This is where earthquake insurance gets a bad rap. In a high-risk area, your deductible could be as much as 15 percent of your home's value. So if your home is worth $250,000, you pay $37,500 in repairs before your insurance company kicks in its share. Put that way, it's easy to see why some people think earthquake insurance isn't worth the money.

But here's the thing: that $37,500 may be peanuts compared to the total cost if your entire home is destroyed. Moreover, that 15 percent is your deductible in an earthquake-prone area. In other parts of the country, your deductible can be significantly less.

To see what your deductible may be, apply for earthquake insurance on today.