Adding earthquake coverage to a standard homeowner’s insurance policy is not a matter of simply checking a box. Instead, it is typically done by purchasing a separate, stand-alone policy or a specific endorsement from a specialized insurer. Because of the unique and high-risk nature of earthquakes, this coverage is almost always offered as an entirely separate product from a standard homeowner’s policy.
The process of adding an earthquake endorsement or purchasing a separate policy is relatively straightforward, but it requires careful attention to detail and a thorough understanding of the coverage you are buying.
The first step is to contact your current homeowner’s insurance company or a specialized broker. Your current insurer may or may not offer earthquake insurance. Even if they do, it may be a good idea to shop for quotes from other companies that specialize in earthquake coverage, such as the California Earthquake Authority (CEA) or private insurers like GeoVera or Chubb. A broker who understands the intricacies of earthquake policies can be a great asset in this process.
When you apply for a quote, you will be asked to provide detailed information about your home, including:
Age and Construction Type: Older homes may be more vulnerable to damage and will have higher premiums. The type of construction (e.g., wood frame, brick, stucco) is also a major factor.
Foundation Type: The type of foundation (e.g., slab, raised foundation with crawl space) is a key determinant of risk.
Location: The location of your home relative to known fault lines is the single most important factor in pricing your premium.
Retrofitting: If you have taken measures to strengthen your home against an earthquake, such as bolting the foundation or bracing the cripple walls, be sure to provide this information. Many insurers offer significant discounts for these retrofitting measures.
Once you receive a quote, you must carefully evaluate the policy’s terms and conditions. Pay close attention to:
The Deductible: Earthquake deductibles are almost always a percentage of the home’s value, not a fixed dollar amount. This can be a very high out-of-pocket expense. For example, a 15% deductible on a $500,000 home is $75,000. Make sure you are comfortable with this amount.
Coverage Limits: Ensure that the coverage for the dwelling, personal property, and additional living expenses is sufficient to protect your assets.
Exclusions: Understand what is not covered, such as fire or flood damage that may follow an earthquake. These are typically covered by your standard homeowner’s and flood insurance policies.
Once you have selected a policy, you will sign the documents and make the initial premium payment. Unlike standard homeowner’s insurance, you will have two separate policies, one for your home and one for earthquake damage. By taking the time to research and understand your options, you can add a crucial layer of protection to your property.