October 6, 2014 in Insurance

Dear Insurance Adviser,
Recently in North Texas, a home had to be destroyed at the homeowner’s expense due to ground movement. The owner did not have insurance to cover the cost. Is there a home insurance policy that would cover ground movement? Also, what if your ground moves and your plumbing is damaged?
— K.C.

Dear K.C.,
Home insurance policies exclude any damage from earth movement, such as — but not limited to — earthquakes. For an additional charge, you can optionally add on an earthquake coverage endorsement that covers damage from quakes and volcanic tremors.

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The more likely an earthquake in your area, the greater the charge.

If the ground moves for any reason other than an earthquake or volcano (a landslide, for example), the earthquake coverage wouldn’t apply.

To answer your plumbing question, if you have quake coverage and the ground moves from something other than an earthquake, your damaged plumbing would not be covered. If an earthquake is the cause, the damage would be covered, subject to your earthquake deductible.

What’s unique about earthquake coverage is that it has a substantial deductible of usually 5 percent or 10 percent of your building coverage amount. That means if you’ve insured a $500,000 home, your deductible could be $50,000. Insurance generally covers 100 percent of the loss above the deductible, once it’s met.

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The earthquake endorsement covers damage to buildings and contents, but does not cover additional living expenses.

Find out more about the history of earthquakes in your area from the U.S. Geological Survey.

Good luck!

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