Does homeowners insurance cover earthquakes?

When it comes to protecting your home, having the right insurance coverage is crucial. Homeowners insurance provides peace of mind against various risks, but what about natural disasters like earthquakes? Many homeowners are surprised to learn that typical home insurance policies do not cover earthquake damage. Understanding this gap in coverage is essential for homeowners, especially those living in seismically active regions.

What Does the Standard Homeowners Insurance Policy Cover?

A standard homeowners insurance policy covers a range of perils, such as fire, theft, and certain natural disasters like windstorms and hail. These policies generally include:

• Dwelling coverage: Protects the structure of your home.
• Personal property coverage: Covers your belongings.
• Liability protection: Shields you from legal responsibility for injuries or property damage.
• Additional living expenses: Pays for temporary housing if your home is uninhabitable due to a covered loss.

However, earthquake damage is notably absent from the list of covered perils. This exclusion means that if an earthquake were to damage or destroy your home, your standard policy would not cover the repairs or replacement costs.

Why Earthquake Coverage is Separate

Earthquakes pose a significant financial risk due to the extensive damage they can cause. Insurers consider this risk too high to include in standard policies without dramatically increasing premiums. As a result, earthquake insurance is typically offered as a separate policy or an endorsement (rider) that you can add to your existing homeowners insurance.

How Earthquake Insurance Works

Earthquake insurance policies vary, but they generally cover:

• Dwelling: Repairs to your home’s structure.
• Personal property: Replacement of damaged belongings.
• Additional living expenses: Costs associated with temporary housing if your home is uninhabitable.

It’s important to note that earthquake insurance often comes with higher deductibles compared to standard homeowners insurance. Deductibles are typically calculated as a percentage of the policy limit rather than a fixed dollar amount, which can result in significant out-of-pocket expenses in the event of a claim.

Assessing Your Earthquake Risk

Illinois is at risk from two major seismic zones, the Wabash Valley Seismic Zone and the New Madrid Seismic Zone (NMSZ).  

Most recent event: 7/15/2024, Somonauk, IL. Earthquake with 3.4 magnitude.
Largest event: 4/18/2008, Mt. Carmel, IL. Earthquake with 5.4 magnitude. 

Click here for more information about earthquakes in Illinois as well as earthquake preparedness: Earthquake (illinois.gov)

Other States: Click here to learn about earthquake risk by state: Information by Region | U.S. Geological Survey (usgs.gov)

How to Get Earthquake Insurance

Earthquake insurance can often be added to your current homeowner’s policy as an add-on.  

As an independent insurance agency, we can shop around and compare rates from multiple insurance companies for you.