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An earthquake can wreak havoc on your home. Specific damage claims vary, but consider the 1994 Northridge quake in California. That 6.7-magnitude earthquake resulted in 195,000 claims, at an average of $30,000 each—or $60,500 in today’s dollars — according to Kathy Kristoff of NBC News.

That’s a hefty chunk of change. And it’s a bill your standard homeowner’s insurance probably won’t cover. Most insurance companies require a policy endorsement or rider to pay for earthquake damage. These can be costly, but not nearly as costly as repairing your home.

If you’d be on the hook for the costs of earthquake damage, then you need to know your risk level, what you can afford if you’re not covered and how much coverage would cost you.

Decide if you need earthquake insurance

In most cases, lenders don’t require earthquake insurance as they do homeowner’s insurance. That doesn’t mean you shouldn’t have it, though. According to the National Association of Insurance Commissioners (NAIC), about 90% of the U.S. population lives in an area that could experience an earthquake of some degree. That means, for most of us, a risk assessment is essential.

The following table includes recent earthquake history in the 16 states that the U.S. Geological Survey has deemed at highest risk of experiencing a major seismic event in the next 50 years.

Recorded earthquakes (magnitude 3 or greater) in the 16 highest-risk U.S. States, 2010-2015

State 2010 2011 2012 2013 2014 2015 Total
Alaska 2,245 1,409 1,166 1,329 1,296 1,575 7,724
Arkansas 15 44 4 4 1 0 69
California 546 195 243 240 191 130 1,495
Hawaii 17 34 40 30 26 53 200
Idaho 7 4 4 11 31 38 95
Illinois 1 0 2 1 0 1 5
Kentucky 0 0 2 0 0 0 2
Missouri 2 3 2 0 1 5 13
Montana 7 11 9 14 29 19 89
Nevada 38 86 22 34 161 172 513
Oregon 4 0 4 2 4 3 17
South Carolina 0 0 0 0 3 0 3
Tennessee 1 0 4 1 1 1 8
Utah 17 16 16 6 10 4 69
Washington 5 14 6 18 6 11 60
Wyoming 43 6 9 73 179 198 508

Source:U.S. Geological Survey, “New Earthquake Hazards Program” and “Simplified 2014 Hazard Map”

To understand your risk, combine historical data with predictive maps and expert assessments. When it comes to earthquakes, past performance is not necessarily a good predictor of the future. California is always active and a known risk. But Missouri, for example, faces a 25% to 40% chance of experiencing an earthquake of magnitude six or greater in the next 50 years, even though recent seismic activity in the state has been minimal. Even states such as Texas and Oklahoma are seeing more activity due to hydraulic fracturing (fracking) now, so risk levels are on the rise in those areas.
A thorough assessment of your risk level will include:

  • Your home’s proximity to a major fault line: A major fault line or other cause of seismic activity, such as fracking, will greatly increase your risk.
  • Materials used to build your home:Homes built with masonry are more vulnerable to earthquake damage, as are framed homes with crawl spaces and multi-story dwellings.
  • Your home’s earthquake resistance level: Newer homes are typically built to withstand more activity.

Understand the rates and deductibles

Your insurance company will determine rates using similar data to what it would use for your standard homeowner’s policy would use, with some additional factors. The NAIC cites the following as potential factors:

  • Your home’s proximity to a seismic zone
  • Your home’s age
  • Your foundation and construction type (masonry will be more expensive to insure)
  • The deductible you choose
  • The cost to rebuild your home
  • Any additional coverage (such as secondary structures)

Just as with your standard policy, your coverage should insure the total rebuild cost of your home, also known as your “dwelling coverage limit.” This is different from your home’s sale or appraisal value. It factors in the costs of construction materials and labor if your home were to need a complete rebuild.

Risk of an earthquake will have the biggest influence on your premium. For instance, a resident of New Madrid County, Missouri, situated right on a major fault, would pay 328% more than a resident of Jackson County, Missouri — where Kansas City is located, far from the New Madrid fault line.

Your deductible is also a significant influencer on your rate, and unfortunately, even the lowest deductibles are not that low. Most earthquake insurance deductibles are between 10% and 15% of the total rebuild value of the home. So on a $300,000 home, you might face a deductible as high as $45,000. If your home doesn’t incur enough damage for a full rebuild, you could be responsible for the entire repair cost, even with insurance. And that’s just on the home itself — you also need to consider your personal property and protection on any other structures.

Be aware of what earthquake insurance covers

With an earthquake policy, you’re covered for direct damage from a specific seismic event (volcano or earthquake). Your policy would define a time period for what constitutes a “single seismic event” — usually 72 hours — during which any aftershock damage would also be covered.

Coverage would include repairs to your home for structural or other interior damage directly related to the quake (except for masonry veneer). It might extend to any additional structures, such as a shed or detached garage, but that sometimes requires an additional policy rider. Your policy would usually include coverage for personal property, such as jewelry and other valuables, up to an amount you decide.

Emergency repairs needed to prevent further damage, necessary building code upgrades and required land stabilization would typically be included in your policy. Earthquake coverage also includes “loss-of-use” coverage for additional housing expenses while your home is being repaired.

In most cases, damage that would be covered under your general homeowner’s insurance or another endorsement is not covered by earthquake insurance. Fire and water damage, even when resulting from an earthquake, usually falls under your basic hazard insurance. Exterior water damage, on the other hand, would be covered under a flood policy.

Earthquake policies won’t cover damage to your land (other than where it supports your house) or vehicles, either. Your comprehensive auto insurance will cover your car.

Be sure your earthquake insurance is worth it

Not everyone needs earthquake insurance. In some areas of the U.S., the risk of an earthquake or volcanic event is almost nonexistent. Paying even a low annual premium, when compared to the limitations of your coverage and the significant deductible, may not be worth it.

But many Americans live in high- or moderate-risk zones. All it takes is one major event in these areas to cause major or even catastrophic damage to your home. Consider what it would cost you to replace your home in the event of an earthquake. Could you afford it? Further, could you absorb the costs of temporary housing or potential damage to your personal property? The price of your premiums may be high if you live in a high-risk area, but they won’t be higher than your replacement costs.

To know if earthquake insurance is worth it for you, weigh those costs and seek a thorough risk assessment.

Know where to get covered for earthquakes

Most major insurers offer earthquake endorsements, so start by talking to your agent. If they don’t offer a policy, ask them to connect you with the state insurance department or other statewide private agency. In California, for example, insurers sell earthquake insurance through the California Earthquake Authority. Many states have similar private agencies that facilitate coverage.

Remember, earthquake coverage only seems unnecessary until the ground under your house starts shaking. Don’t wait until your house is in shambles to evaluate whether earthquake insurance is worth it for you.