How Important is Earthquake Insurance?

Although this region of the country isn’t usually affected by earthquakes, it is still important to consider insurance coverage for it in other areas. Earthquake insurance, just like flood insurance is not usually included in your homeowners policy. For homeowners in Connecticut, earthquake insurance is not something we think about often as a necessity, but along the Pacific coast it is a common topic of discussion.
Did you know that more than 80% of the world’s largest earthquakes occur in what is called the Pacific earthquake belt, or what it is more commonly known as, the “Ring of Fire”? The Pacific earthquake belt runs along the entire Pacific coast from southern California all the way up to Alaska. Even though earthquakes are fairly common in California, only about 15% of homeowners have an earthquake insurance policy for their home. This number is less throughout the entire country at only 7%.
As stated earlier, most homeowners insurance policies do not cover damage caused by earth movements such as earthquakes, sinkholes, or landslides. More often than not, homeowners need to get a separate policy for earthquake coverage, and this is offered by most major insurance companies.
Did you know that not only homeowners need to look into earthquake insurance? In fact, those who live in an apartment may need to look into it as well because most renters insurance policies do not cover damage from earthquakes. Just like with homeowners insurance, renters who might be in an area that are at risk of earthquakes are advised to take out additional coverage as well.
If you are a homeowner looking into earthquake coverage, just know that most policies may cost you a good amount if you have to file a claim. Believe it or not, the average deductible for earthquake insurance is 15% of your home’s value. This means that if you were effected by an earthquake and something detrimental were to happen to your home, you would have to pay 15% of the home’s value out of pocket to cover the damages.
Many homeowners who are at risk of earthquakes often ask the question, is earthquake insurance worth it? Even 25 years after the Bay Area Quake, most California homeowners who are at risk still don’t have earthquake insurance. In October of 1989, an earthquake with a 7.1 magnitude hit a 20 plus mile stretch of California along the Bay Area and San Andreas Fault. Even after a 6.0 magnitude earthquake hit San Francisco in August of 2014, many homeowners in the area are still without earthquake insurance coverage.
In my opinion, the answer to the question “is earthquake insurance worth it” is it depends. The reason for this is because most parts of the country are unaffected by earthquakes and other earth movements, but those who live in a high risk area should have it. I believe homeowners in California living along the coast should be required to have earthquake insurance just like how most people living near water need flood insurance.
If you are unsure if your homeowners insurance policy covers earthquakes, sinkholes, landslides, or other earth movement type of damages, consult the professionals at Ion Insurance today!