How to Prepare for an Earthquake with the Right Insurance

By the Mercury Team

Earthquakes can strike at any time and without warning. If you live in a high-risk area, it’s not a matter of if an earthquake happens, but when and how large it will be. You might think your homeowners insurance can protect you when disaster strikes, but usually, that’s not the case. To truly protect your home and finances, you need the right earthquake insurance. In this blog, we’ll explore why earthquake insurance is essential, what it covers, how much it costs, and how to get it.

Why Your Homeowners Insurance Won’t Cover Damage from an Earthquake

Most homeowners insurance policies don’t cover damage from an earthquake. Similar to flood insurance, you must purchase earthquake insurance separately from your standard home insurance policy. Without it, you’ll have to pay out of pocket to replace broken possessions, repair any damage, or even rebuild your home.

So why isn’t earthquake damage covered? Homeowners insurance typically covers things like fire, theft, and certain natural disasters like wind or hail. However, earthquakes are considered high-risk events with the potential to cause catastrophic damage. Because of this, insurance companies often exclude earthquake coverage from standard policies to keep premiums more affordable.

What Does Earthquake Insurance Cover?

Earthquake insurance is designed to help you recover from the financial impact of an earthquake, and it covers several key areas:

• Structural damage: This includes the cost to repair or rebuild your house if it’s damaged or destroyed by an earthquake. Whether it’s cracks in the foundation, walls, or even a total collapse, earthquake insurance can help you manage the substantial costs associated with these repairs.
• Personal property: Earthquake insurance typically covers damage to your personal property, such as furniture, electronics, clothing, and other valuable items inside your home.
• Temporary living expenses: Earthquake insurance often includes coverage for temporary living expenses. This means that if you need to stay in a hotel or rent a temporary residence while your home is being repaired, your policy can help cover these additional costs.

It’s important to know that earthquake insurance, like any insurance policy, has its limitations. For example, most policies won’t cover damage to your land, such as sinkholes or erosion caused by an earthquake. Also, earthquake insurance won’t cover vehicle damage. Your auto insurance typically covers this if you have comprehensive coverage.

Another common exclusion is pre-existing damage. If your home already has damage that worsens after an earthquake, the insurance may not cover the cost.

How Much Does Earthquake Insurance Cost?

According to Forbes, the average cost of earthquake insurance is about $850 per year. However, several factors can influence how much you pay, including:

Location

Your premiums might be higher if you live in an area with a higher risk of earthquakes, like California, Alaska, or Washington. The closer you are to a fault line, the more expensive your coverage will be.

Home construction

The type of home you have also affects the cost. Homes built with wood tend to withstand earthquakes better than brick or stone ones, potentially lowering your premium. Newer homes, which are built to more stringent earthquake-resistant standards, may also qualify for lower rates.

Deductibles

Earthquake insurance typically comes with higher deductibles than other types of insurance — usually ranging from 10% to 25% of your home’s insured value. For example, if your home is insured for $300,000, you might have to pay $30,000 to $60,000 out of pocket before your insurance covers the remaining damage. The higher the deductible you choose, the lower your premium will be, but you’ll need to be prepared to cover those initial costs if an earthquake happens.

How to Get Earthquake Insurance

Here are some steps you can take to secure an earthquake insurance policy.

1. Assess Your Risk

First, consider where you live. If you’re in an earthquake-prone state like California, you’ll most likely need coverage. Even if you’re not in a high-risk zone, it’s still worth considering, as earthquakes can happen unexpectedly.

2. Decide How Much Coverage You Need

Think about the value of your home and belongings. How much would repairing or rebuilding your home cost if an earthquake hit? How much would it cost to replace your belongings? Don’t forget to consider temporary living expenses, too, in case you need to move out while repairs are being made.

3. Contact a Mercury Agent

Working with a Mercury agent can help you assess your risk, review your current coverage, and suggest the best options for adding earthquake insurance. They can also provide personalized advice based on your specific situation and help you understand the different policy options available. If you live in California, you can purchase earthquake insurance from the California Earthquake Authority via your agent.

4. Finalize Your Policy

Once you’ve picked the coverage that suits your needs, your Mercury agent will help you finalize everything. They’ll walk you through selecting your deductible, setting your coverage limits, and making sure you understand all the details of your policy.

Earthquake Preparedness Tips for Your Home

Consider some of these earthquake preparedness tips to help protect your property and loved ones.

Retrofit Your Home

If you live in an older home, it might not be built to withstand the shaking and shifting of an earthquake. Retrofitting your home, which involves reinforcing the foundation, securing the frame, and bracing walls, can make a big difference. While retrofitting can be an investment, it’s one that could save you from costly repairs down the road — and potentially save lives.

Secure Heavy Items

Inside your home, take a look around and secure heavy items that could fall or topple over during an earthquake — e.g., bookshelves, televisions, and large appliances. Use brackets or straps to anchor them to walls, and make sure to store fragile or valuable items safely.

Create a Family Emergency Plan

Having an emergency plan can really help if an earthquake hits. Here’s what you should do:

• Sit down with your family and talk about what to do during an earthquake.
• Pick a safe meeting spot outside your home, and make sure everyone knows how to turn off things like gas and electricity.
• Keep emergency supplies, like water, food, flashlights, and a first-aid kit, in an easily accessible location.
• Practice your plan regularly.

Integrate Insurance with Your Preparedness Plan

While you’re taking steps to make your home safer, remember that your insurance is there to help you recover if the worst happens. Make sure your policy is up to date and reflects any upgrades you’ve made to your home, like retrofitting. You can also review your coverage regularly with your Mercury agent to ensure it meets your needs.

Conclusion

Is earthquake insurance worth it? While the cost might seem like an extra expense, it’s a small price to pay compared to the financial devastation an earthquake could bring. With the right coverage, you’ll have peace of mind knowing that you won’t be left to handle expensive repairs or rebuild your life on your own.

If you’re ready to explore your options, Mercury is here to help. Our agents can guide you through the process, help you find the right coverage for your needs, and get you the protection you deserve. Plus, if you need cheap homeowners insurance, you’ll find affordable rates without sacrificing quality coverage.

Contact us today for a fast, free quote!