Information about earthquake insurance



Posted on July 8, 2010 at 10:23 AM

Information from the Washington State Department of the Insurance Commissioner.

Earthquake insurance provides coverage if your home is damaged by an earthquake. Your standard homeowner and renters policies will not cover earthquake damage. Earthquake insurance is a separate endorsement you must buy and add to your homeowner or renters policy.

An earthquake endorsement generally excludes damages or losses from floods and tidal waves – even when caused or compounded by an earthquake. However, if you experience a loss due to a landslide, settlement, mudflow, or the rising, sinking and contracting of earth, your endorsement may cover it if the damage resulted from an earthquake.

How earthquake coverage works

Unlike most homeowner or renters policies, earthquake insurance is designed to cover catastrophic damage. Insurers normally sell it with deductibles equaling 10 to 25 percent of the structure’s policy limit.

This limit works much like the deductibles on your auto insurance. The insurance only pays for damages that exceed the deductible. However, unlike car insurance, some earthquake policies treat contents and structure separately. You may have a separate deductible for each of the following:

•the contents

•the structure

•unattached structures like garages, sheds, driveways or retaining walls

Not all policies are alike. You should compare the coverage differences between companies to get the coverage that fits your needs.

What to expect from insurers when buying an earthquake policy

Some insurers may require an inspection of your property before they will agree to issue a policy. For example, many companies require and will check to see that your home is bolted to its foundation – a practice that wasn’t required by building codes until the early 1960s.

Other factors an insurer might consider include:

•The location and bracing of interior walls

•Strapping guards to secure fixtures, such as water heaters

•The method used to mount shelves on walls

Many of these improvements are not expensive, while others can be expensive and may require a contractor. You need to think about your individual situation before you decide to take on construction improvements to qualify for earthquake insurance.

Additionally, requirements vary from insurer to insurer. And some insurers may even waive construction changes if you are willing to buy coverage with a higher deductible.

What you can do to minimize damage before an earthquake occurs

•Make sure your water heater, gas appliances, and other such fixtures are fastened securely.

•Ensure bookcases, wall hangings, and hanging plants are secure and fastened to walls and ceilings.

•Make sure you have a family “emergency plan” and all family members know what they should do if an earthquake occurs. Designate a meeting place outside the home where family members can gather once the danger has passed.

•Designate a distant relative or friend who can serve as a point of contact and communication for you and your family members if you get separated.

•Plan ahead. Keep flashlights, batteries, and candles on hand. Make sure you have a portable radio.

•When shopping for earthquake insurance, ask the company to help you identify possible repairs and other improvements that will make your home safer and minimize damage.

•Everyone in your house should know how to turn off utilities (electricity, water, and gas) at the home.

Earthquake insurance may not be available immediately after an earthquake

When a significant earthquake occurs in an area, insurers often suspend new sales. The suspension may last several days, or until the likelihood of damaging aftershocks diminishes. Earthquake