Earthquake Insurance

Earthquakes: Consumers Need Special Insurance for Coverage

5,000. That’s the number of earthquakes felt in the United States each year. Popular belief may consider California to be the state at most risk of an earthquake, but since 1900, earthquakes have caused damage in all 50 states, according to the Insurance Information Institute.

Interestingly, Alaska experiences more earthquakes that any other state, though California remains the greatest risk for widespread and catastrophic damage to property.

No matter where you are, homeowners and business owners have limited or no protection in their existing insurance coverage for earthquake damages. Some damages caused by specific conditions subsequent to the shaking and cracking—such as fire due to broken gas lines or water damage due to burst water pipes—may be covered by home and business insurance policies. However, property owners should be aware that property insurance does not cover the damage or destruction of buildings or personal property caused by the shaking and cracking of an earthquake.

Who should buy earthquake insurance? United Policyholders, a non-profit organization focused on educating the public on insurance issues and consumer rights, draws the following conclusion: “If you live in [earthquake] country, have equity in your home and couldn’t afford to rebuild it on your own, buying earthquake insurance makes financial sense. It really is that simple.” For earthquake insurance, it’s important to consider having enough coverage to repair or rebuild a home in light of building code improvements put in effect after the house was built. Plus, consumers will need funds for living expenses while the earthquake-damaged house is repaired.

For earthquake activity in New England, you might wish to look over the statistics, maps and graphs on this very interesting Massachusetts site.