How do I evaluate the need for earthquake protection?

ByContent writing
home insurance

If you’re on the fence about whether or not to purchase earthquake insurance, think about the following:

  • nearness to seismically active faults
  • local seismic history (frequency of earthquakes)
  • construction period since the previous earthquake (type of building and foundation)
  • Local site circumstances, the level of earthquake resistance accounted for in the design of the building’s framework, the quality of the building’s construction (type and condition of the soil)
  • Annual precipitation value of the building and its contents relative to the inclination of the landfill material geological structure of the earth
  • Insurance premiums, coverage limits, and deductibles (i.e., the deductible).

A correct diagnosis requires that you consult a professional. The U.S. Geological Survey can’t provide advice, but your home insurance agent could know more.

No typical house, renter’s, or condo insurance policy will pay for earthquake damage. Mortgage lenders and homeowners’ associations seldom mandate earthquake insurance, but it’s a good idea to have it if you reside in an earthquake zone.

Standard house, renter’s, and condo insurance policies do not cover earthquake damage. Your mortgage lender or homeowners’ association won’t need earthquake insurance unless you reside in a very earthquake-prone location.

How important is it to have flood and earthquake coverage?

There are several aspects to consider when deciding whether or not to invest in earthquake or flood insurance.

Situating is key. Most mortgage lenders will only lend money to borrowers in high-risk flood regions with proof of flood insurance, and some may even insist that borrowers in moderate- to low-risk areas get flood insurance. More than 20% of flood damage claims originate from outside the greatest risk locations, suggesting that it may be worthwhile to do so even if it is not mandated. It also doesn’t take much water to inflict damage; only an inch might result in repair costs in the tens of thousands.

It’s a good idea to check out earthquake coverage if you reside in a seismically active region. A map of seismic activity in your area is available from the U.S. Geological Survey. Your house is less likely to survive an earthquake if it is made of brick or stone, is elevated off the ground, or has not been reinforced against seismic activity. Depending on your insurer, earthquake coverage may be added to your current home policy or bought separately.