Unknown by most homeowners, Earthquake insurance is not included in standard homeowner’s policies. A supplemental or separate policy is required for earthquake liability coverage.

Typically, we think earthquakes strike only in a small portion of the country—namely California, Oregon and Washington. However, more recent experience also shows that the Midwest region is at relatively high risk of earthquakes due to a fault line that runs through those states.

Earthquake Coverages:

Earthquake policies typically cover damage to your house and your belongings, up to the insured amount. If possible, you’ll want to buy enough to cover the cost of rebuilding your house and replacing your belongings. While your standard homeowner’s policy may cover fire damage that results from an earthquake, an earthquake policy is important to cover damage that results from shaking, such as structural collapse.

Earthquake coverage is typically purchased as a supplemental to your current homeowners’s policy, but a separate earthquake policy is also available.

Because of the massive potential damages associated with an earthquake, coverage tends to be expensive. Your premium amount will depend on your location, along with the age and structural composition of your home. In addition, earthquake policies include a percentage deductible, generally ranging from 2 to 20 percent of total damages, which means you’ll still have significant out-of-pocket costs in the event of an earthquake. However, you’ll want to weigh the cost against your risk of experiencing an earthquake, and your ability to survive the financial aftermath of such a catastrophic event. In assessing your financial exposure, it’s important to know that the government typically will not provide much financial aid for earthquake victims, and help may be limited to low-interest loans that you will need to repay.

Talk to an agent today about your earthquake liability risk to see if adding a supplemental to your homeowners policy is right for you.