Earthquake Insurance Basics

Earthquake damage is one of the fastest claim denials in the entire insurance world. If the ground moves—even slightly—your standard homeowners policy shuts the claim down instantly. The only way to get paid for quake-related structural damage, foundation cracking, or shifting is through earthquake insurance.

If you want to understand how earthquake exclusions interact with other structural coverage, review the breakdown on dwelling coverage before you assume your home is protected.

1. What Counts as Earthquake Damage

Insurers treat all ground movement the same. If the earth moves and your home is damaged because of it, that’s earthquake damage—even if the quake wasn’t large enough for you to feel.

• Cracked foundations
• Shifted walls or framing
• Broken slabs and driveways
• Damaged chimneys and masonry
• Interior cracking from structural movement

Without a quake endorsement, these are automatically excluded under homeowners insurance.

2. What Earthquake Insurance Actually Covers

Earthquake insurance focuses on structural damage and essential systems. Coverage varies by state and insurer, but most policies include:

• Foundation and structural repairs
• Plumbing, gas lines, and electrical systems
• HVAC units damaged by shaking
• Rebuilding costs for severe structural failure
• Personal property (if added as an option)

Personal belongings are not automatically covered—you must add contents coverage. See personal property coverage for a deeper look at how belongings are normally handled.

3. What Earthquake Insurance Does NOT Cover

Earthquake insurance is not an all-risk policy. These exclusions are standard:

• Flooding or tsunami damage (requires flood insurance)
• Fires after the quake (covered under homeowners insurance)
• Landscaping damage
• Fencing and outdoor structures not attached to the home
• Sinkholes (separate coverage)

The “aftershocks of coverage” often surprise people—quake insurance repairs the home, but anything caused by water intrusion from flooding is a separate issue.

4. The Deductible Trap (Often 10–25% of Dwelling Coverage)

Earthquake deductibles are percentage-based, not flat-dollar amounts. This is where homeowners get blindsided.

• 10%–25% of the dwelling limit is common
• $400,000 dwelling limit + 15% deductible = you pay $60,000
• Deductible applies to both structure and contents (if covered)

Earthquake insurance protects you from catastrophic collapse—not minor cracks or cosmetic damage. If the repair cost doesn’t exceed the deductible, there is no payout.

5. Loss of Use Coverage for Earthquakes

Many earthquake policies include additional living expenses, but not all. If included, it pays for temporary housing if your home becomes unsafe to occupy. This matters because post-quake displacement is often long and expensive.

• Hotels and rentals
• Increased food and fuel costs
• Temporary storage

If your policy lacks ALE, compare it to how standard ALE works in the guide on loss of use coverage.

6. Who Needs Earthquake Insurance?

You don’t need to live on a famous fault line to be at risk. Smaller quakes happen everywhere, and older homes, slab foundations, and unreinforced masonry are especially vulnerable.

• States with known fault lines
• Regions with soft soil or basin geology
• Homes built before modern seismic codes
• Masonry-heavy construction

If repairs would financially destroy you, earthquake insurance becomes less of an option and more of a buffer you can’t afford to skip.

7. When to Reevaluate Your Earthquake Risk

• After remodeling or structural changes
• After new seismic mapping or nearby quake activity
• When your home value increases significantly
• When deductibles or rates change at renewal

Earthquake coverage is slow to buy but fast to regret not having. Once the ground moves, it’s too late.