There are plenty of hazards—fires, severe storms, vandalism, etc.—that might damage your home, destroy possessions and make your own ability to live on the property difficult, at least temporarily. That’s probably a big part of the reason why you have homeowners insurance. You want it to be there to help you afford the costs of recovering from unexpected property losses.
Still, a standard homeowners insurance policy won’t cover you against all potential damage risks, and certain hazards are frequently excluded. Earthquakes are among those hazards that you will frequently find that you have no coverage for unless you invest in an appropriate earthquake insurance endorsement for your homeowners policy. Here’s how this coverage works.
Homeowners Insurance for Earthquakes
When taken at face value, homeowners insurance frequently doesn’t cover earthquake damage. Major quakes are extremely rare, not to mention very unpredictable. Additionally, while quakes can occur in any part of the country, they are often minor, even imperceptible, in many communities. Therefore, homeowners insurance policies often don’t need this benefit as one of their essential components. Given the high unpredictability of quakes, it is often a cost burden to both insurers and consumers when plans contain coverage for risks that are simply not likely to occur.
Generally, if a quake occurs, then your homeowners insurance will only cover damage caused by a hazard resulting from the quake, not damage caused by a quake itself. Therefore, if a quake were to cause a fire in your home, then your plan can cover the fire damage to your dwelling and possessions, while also covering living experiences you incur while living away from the home. However, if the quake is the only cause of household damage, then your plan is unlikely to cover you.
Still, if you are particularly concerned about earthquake risks in your area, then you can still adapt your homeowner’s insurance to address these issues. Many homeowners insurance plans offer earthquake insurance endorsements, meaning that you can purchase this separate coverage as an added benefit on top of your existing policy terms.
Essentially, your earthquake endorsement will make your primary homeowners coverage expand. Therefore, it will generally cover your dwelling, other structures on the property, additional living expenses and personal possessions damaged in the quake. As a result, damage will not have to result from an additional hazard in order to qualify for coverage. Instead, the damage caused by the quake alone will qualify for coverage.
Though earthquake risks might be minimal in your area, that doesn’t mean they don’t exist. Therefore, by investing in an earthquake insurance endorsement, you might be saving yourself from significant financial losses sometime in the future.
Still, it is important to consider the cost benefit of buying coverage for a risk that might not be a clear danger in your area. Is it worth making the investment? To answer this and many more questions about earthquake insurance, just contact one of our agents.