Will a standard home insurance policy cover your home for earthquake damage? The short answer is no, though it may cover damage from a fire or broken pipes that follow. But consumers can add a home insurance earthquake endorsement to their policy, although "not every insurance company offers earthquake coverage," says Don Griffin, vice president of personal lines for the Property Casualty Insurers Association of America. Separate, stand-alone home insurance earthquake coverage is also available. Unlike flood insurance, which is available from through FEMA (Federal Emergency Management Agency), earthquake insurance is offered by private insurance companies. Homeowners looking for California earthquake insurance can buy from a private company or through the publicly managed California Earthquake Authority (Its current slogan is "California Rocks!"). Costs vary dramatically, not only according to location but also by the age and construction of the home, and how big a deductible you choose. For example, insuring a 20-year-old, slab-foundation, one-story wood-frame home for its replacement value of $425,000 in Napa, California, would cost about $1,383 a year, the CEA estimates. The same home built of brick would cost $2,451. Even that policy requires a 10 percent deductible; that is, the owner would be responsible for the first $42,500 in repairs. Only about 12 percent of California homeowners buy earthquake coverage. Coverage is much cheaper in other areas of the country -- as little as 50 cents per $1,000. In general, you'll pay more for earthquake coverage if your home is:
Built of brick or masonry.
On a raised foundation.
Older (predating changes to building codes) and not retrofitted to limit damage.
In a higher-risk zone; that is, near an active area or on soil that is more likely to move.
While many homeowners might not think of buying earthquake coverage until the ground shifts beneath their feet, that's too late. After an earthquake of any consequence, there's a moratorium on new policies of 30 to 60 days (when the threat of aftershocks is present) in most states.
Earthquake insurance coverage
Earthquake insurance covers both the structure and the contents of a home. Homeowners decide how much insurance they want to purchase for each type of coverage.