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Earthquake Insurance: What Does It Cover, And Do You Need It?

Jan 30, 2024



Earthquakes can cause significant damage to your home. In the worst cases, an earthquake can demolish buildings altogether. While the damage can be expensive to repair, the high cost of most earthquake insurance policies leads many homeowners to forgo this type of optional insurance coverage.

We weigh the costs of an earthquake insurance policy against the risks of going without to help you decide whether or not to purchase a policy.

What Is Earthquake Insurance?

Earthquake insurance is optional insurance coverage that provides protection against the damage that an earthquake can cause to your home and property. Those without earthquake insurance will be liable to pay for repairs in the event of an earthquake.

Importantly, this type of insurance is separate from standard homeowners or renters insurance.

Percentage Of Homeowners With Earthquake Insurance In Each Region

With the high cost of earthquake insurance, it’s not surprising that most homeowners don’t carry this optional coverage. The table below highlights what percentage of homeowners carry earthquake insurance in each region.

West 28%







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What Does Earthquake Insurance Cover?

Exactly what your earthquake insurance covers will depend on your individual policy. In general, though, an earthquake insurance policy consists of the following parts:

  • Dwelling: Dwelling coverage helps you pay to repair or rebuild your home after damage caused by an earthquake.
  • Personal property: If you lose personal property during an earthquake, this insurance can help you pay for replacements. For example, the policy might cover damaged personal items like your TV or furniture.
  • Other structures: If you have other structures on your property, like a shed, it might be covered by your earthquake insurance policy. After damage caused by an earthquake, the insurer may help you pay for repairs.
  • Additional living expenses: If you need to live somewhere else while your home is being repaired, your earthquake insurance policy might help you cover the costs.
  • Building code upgrade coverage: If you need to rebuild your home at an increased cost because the original structure isn’t compliant with current building codes, your insurance will help pay those extra expenses.

Depending on your needs, you might choose to purchase a policy with specialized riders. For example, homeowners with homes that have masonry veneers may need to purchase a rider to cover repairs after an earthquake.

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What Does Earthquake Insurance Not Cover?

Earthquake insurance doesn’t cover every peril under the sun. While the details of your unique earthquake insurance policy may vary, below is a look at some issues that are usually not covered by earthquake insurance:

  • Fire
  • Water damage
  • Sinkholes and other earth movement from non-seismic activity
  • Water supply systems
  • Patio covers
  • Landscaping
  • Aircrafts
  • Stored data
  • Fences
  • Watercraft
  • Motor vehicles
  • Swimming pools and hot tubs

If you experience water damage after an earthquake, that’s usually not covered. Instead, you’d need to have an active flood insurance policy.

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Do I Need Earthquake Insurance?

When considering earthquake insurance, it’s important to weigh the following questions:

  • How likely is it that an earthquake will happen in your area?
  • How likely is it that an earthquake would cause damage to your home?
  • Would you be able to afford to repair your home after an earthquake without the help of insurance?

If you live in an area prone to earthquakes and wouldn’t have the funds to repair your home after an earthquake, then it could make sense to protect yourself from risk by purchasing an earthquake insurance policy.

To better understand how often damaging earthquakes occur in your area, check out this map from the United States Geological Survey (USGS). Areas with the highest risk tend to be in California, Washington, Montana, Idaho, Alaska, Hawaii and Tennessee.

While earthquake insurance can be great to have if your home is seriously damaged and the damage exceeds your deductible, the high premiums and deductibles that come with earthquake coverage can make the balance between what you pay and what you get uneven.

According to the Federal Emergency Management Agency (FEMA), most potential earthquake insurance buyers aren’t likely to experience damage that would exceed their deductibles. With that, it’s critical to weigh the costs and benefits carefully before committing to an earthquake insurance policy.

Determining How Much Earthquake Insurance Coverage You Need

If you decide that you want to purchase earthquake insurance, getting the right amount of coverage is key.

Since you want help rebuilding the home after this disaster, you’ll need to purchase enough coverage to cover the rebuilding costs. In general, you’ll choose a policy limit similar to the dwelling limits attached to your homeowners insurance policy.


Beyond rebuilding costs, you’ll want to purchase enough coverage to replace your personal belongings after a catastrophe.

Earthquake Insurance In California

California experiences 90% of the country's earthquakes, so the state has a very robust earthquake insurance program. In fact, California Earthquake Authority (CEA), which offers coverage through any participating insurance company, is the largest provider of earthquake insurance in the country.

California residents can purchase earthquake insurance policies through their homeowners insurance provider. If you live in California and want to know how much coverage on your home would cost, CEA offers a free calculator that can give you an estimate of your premium.

How Much Is Earthquake Insurance?

There’s no getting around it: Earthquake insurance can be expensive, and the more likely you are to need it, the more it will likely cost you. But the exact cost of your policy will vary based on the specifics involved. Below is a look at some of the factors that will impact your earthquake insurance costs:

  • Your deductible: In general, a higher deductible leads to lower insurance premiums. Deductibles for this type of insurance policy tend to range from 10% to 20% of your coverage limit.
  • Location of the home: If your home is a high-risk location, you should expect to pay more for earthquake insurance.
  • Age of the home: If you have an older home, without upgraded safety features to mitigate earthquake damage, then you’ll likely pay more for coverage.
  • Number of stories in the home: A home with multiple stories will likely cost more to insure against earthquakes than a single-story home.
  • Rebuilding cost: The estimated rebuilding costs have a big impact on your insurance costs. A higher home value and rebuilding cost will likely lead to higher insurance premiums.

As a general range, annual earthquake insurance premiums can fall anywhere from $800 – $5,000, and policy deductibles can be as high as 10% – 20% of your coverage limit. But it’s important to shop around to find the right policy type and price point for your situation.

The Cost Of Earthquake Insurance In California

Since California is a relative hotspot for earthquakes in the United States, residents tend to face much higher earthquake insurance premiums than the rest of the country.

On average, homeowners in California pay an average of $739 per year for earthquake insurance. However, your exact costs can vary widely based on the amount of coverage you need, the home’s risk and other factors.

How To Save Money On Earthquake Insurance

If you want earthquake insurance, shopping around can help you save money. Each insurance company has a slightly different method of determining rates, which can help you lock in a lower price when you compare quotes.

Another way to lower your earthquake insurance costs in California is to commit to a seismic retrofit. This strengthens your home’s structure against earthquakes, which can lead to a discount between 10% and 25%. Of course, a retrofit can cost thousands of dollars. But depending on your income and location, you might be eligible for a grant of up to $3,000 to help cover the costs of a seismic retrofit through the California Earthquake Authority.

Additionally, choosing a higher deductible can help you find a lower insurance premium. But you’ll be on the hook for more if an earthquake does actually damage your home.

RHB Assets From IGX: A colorful hazard map displaying various risk levels across different regions.

While earthquake insurance can be great to have if your home is seriously damaged and the damage exceeds your deductible, the high premiums and deductibles that come with earthquake coverage can make the balance between what you pay and what you get uneven.

According to the Federal Emergency Management Agency (FEMA), most potential earthquake insurance buyers aren’t likely to experience damage that would exceed their deductibles.

How To Get Earthquake Insurance

If you’re ready to purchase earthquake insurance, start by asking for more information from your homeowners insurance company. Many companies offer a bundling discount for purchasing multiple policies, which can make it cost-efficient to work with the same company.

But before you commit to a policy, take some time to get quotes from multiple insurance companies. Shopping around can help you find the most affordable quote for the coverage you need.

FAQs About Earthquake Insurance

You have questions about earthquake insurance. We have answers.

Does homeowners insurance cover earthquakes?

No. Standard homeowners insurance policies don’t cover damage caused by earthquakes.

How much is earthquake insurance?

How much you’ll pay for earthquake insurance varies based on your unique situation. But in California, homeowners paying for this coverage face average costs of $739 per year.

How much is the deductible on earthquake insurance?

In general, deductibles for earthquake insurance policies can range from 2.5% to 25% of your coverage limit. The exact deductible you’ll face varies based on your insurer.

Is earthquake insurance worth it?

Earthquake insurance may or may not be worth it based on where you live and how much you’ll pay. If you aren’t likely to experience damage that will exceed your deductible, then earthquake insurance may not be a worthwhile purchase.

The Bottom Line

Whether you decide to purchase earthquake insurance or not, it’s important to make an informed decision and at least evaluate your level of risk to determine if purchasing a policy makes financial sense for you.

If a natural disaster damages your home, or you want to be prepared in the event one does happen, see how to file an insurance claim.

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Sarah Sharkey

Sarah Sharkey is a personal finance writer who enjoys diving into the details to help readers make savvy financial decisions. She’s covered mortgages, money management, insurance, budgeting, and more. She lives in Florida with her husband and dog. When she's not writing, she's outside exploring the coast. You can connect with her on LinkedIn.