What Does Earthquake Insurance Cover?

An earthquake can be a traumatic life event, so hopefully earthquake insurance covers everything. Right?

Well yes, there’s that.

But there is some fine print that you should be aware of before you buy earthquake insurance.

Let’s go over exactly what it does and doesn’t cover so you know what to expect.

1. What Is Earthquake Insurance?
2. Does Homeowners or Renters Insurance Cover Earthquakes?
3. What Does Earthquake Insurance Cover?
4. What Doesn’t Earthquake Insurance Cover?
5. Do I Need Earthquake Insurance?
6. Frequently Asked Questions

Earthquake insurance reimburses you for the costs to repair or replace your home and belongings if they’re damaged or destroyed by an earthquake. If your home is so damaged that you can’t live in it, earthquake insurance can reimburse you for temporary living arrangement expenses (like your hotel and food).

For an in-depth understanding of earthquake insurance, check out our complete guide to how it works.

Let’s address this important gotcha right away. Neither renters nor homeowners insurance covers earthquake damage. So, it doesn’t matter if you rent or own, you still need a separate earthquake insurance policy to get reimbursed for earthquake-related expenses.

For homeowners in an earthquake-prone area, if the walls in your home crack, or worse, crumble from earthquake activity, the cost for repairs can be enormous. Earthquake insurance would help you out here, but your homeowners insurance won’t.

For renters, again, if you live in a high-risk area, earthquake insurance is a good idea to help you protect your belongings and keep roof over your head after an earthquake.

If that expensive desktop computer you just bought is damaged in an earthquake, renters insurance won’t reimburse you for a new computer (ugh, we know). But earthquake insurance will.

Now for that fine print we mentioned earlier. There are three main parts of earthquake insurance coverage—damage to your home (dwelling), damage to your personal belongings, and additional living expenses (ALE). Your policy will explain how claims are handled for each type of coverage.

Let’s go over each one.

Damage to Your Home (Dwelling)

This part of your earthquake insurance policy covers the cost of repairing or rebuilding your home and any attached structures (like a garage or patio).

For example, imagine you notice several floor-to-ceiling cracks in your living room wall days after an earthquake. The dwelling portion of your earthquake insurance policy would cover the installation of new sheetrock, paint and labor.

Personal Belongings

If you’re worried about your new 65-inch flat screen TV that fell to the floor during an earthquake, you can exhale. Earthquake insurance covers the cost of repairing or replacing your stuff, including furniture, clothing, appliances and yes, electronics.

Additional Living Expenses (ALE)

There’s more good news. If the damage to your home from an earthquake is so severe that you can no longer live there, you can tap into the ALE part of your coverage to pay for temporary housing expenses while your home is being fixed.

For example, suppose an earthquake destroys your home (we’re praying this never happens) and you have to live in a hotel while your home is being rebuilt, the ALE portion of your policy would help pay for your hotel bill.

Things can get tricky here. Let’s take them one by one.

First, earthquake insurance does not cover indirect damage caused by an earthquake. Indirect damage is when something is damaged as a result of a natural disaster (fire, flood, etc.) that’s caused by a quake.

Protect your home and your budget with the right coverage!

Here’s an example: Suppose a pipe bursts in your home and causes extensive water damage. The reason the pipe burst in the first place is because of an earthquake. So you might assume earthquake insurance would kick in here.

Nope. In this case, earthquake insurance would not cover damages to your home because the damage is an indirect result of an earthquake. Your homeowners insurance would cover your losses instead.

Next, if water damage is from an external source, like if an earthquake causes a tsunami and soaks your stuff, it’s flood insurance that would cover your losses.

Here’s another one. What if an earthquake topples a tree that falls on your car? Would car insurance cover the losses or earthquake insurance? Your car insurance would reimburse you for damage here. But only if your policy includes comprehensive coverage.

Wait. What? How can you tell what earthquake insurance covers, or not, and when?

To help make it clearer, we put together a chart that simplifies what earthquake insurance typically does and doesn’t cover.

Does Cover	Doesn’t Cover
Dwelling	Indirect damage (fire, flood)
Attached structures (garage, patio)	Unattached structures (pool, fence, car)
Personal belongings (furniture, electronics)
Temporary housing

Still have questions? Your best bet is to connect with one of our Endorsed Local Providers (ELPs) who can explain exactly what earthquake insurance does and doesn’t cover.

Why buy something you don’t need? Right?

Agreed. Especially if you’re working on building your wealth with the Baby Steps.

But what would happen if you skipped on this coverage, even though you’re in a quake-prone area. If an earthquake were to damage your home, your only option would be to empty your savings account. So before you go with the easy answer to Do I need earthquake insurance? do your research and really think through your decision.

Still have questions about earthquake insurance coverage? Here are a few common questions and answers:

1. What if I have a condo?

Condos are considered dwellings—so earthquake insurance policies will typically cover earthquake damage to your condo. Also, if your homeowner’s association (HOA) charges a fee to measure the damage to your condo’s building, those fees are usually covered by earthquake insurance too.

2. What if my home’s landscaping is ruined by an earthquake?

Landscaping is considered separately from your dwelling. So, just like pools and fences, your lovingly tended garden unfortunately isn’t usually covered by earthquake insurance.

3. What if I have a mobile home?

Earthquake insurance for mobile homes is usually pricey. The reason? Mobile homes have an even higher risk of damage because their support isn’t as strong as traditional houses.¹ If you live in a mobile home, we suggest talking to an insurance agent to find out how best to retrofit your mobile home to reduce earthquake insurance coverage costs.

Work With an Expert

Earthquake insurance coverage can get tricky. The best way to learn what is and isn’t covered in your area is to connect with one of our Endorsed Local Providers (ELPs).

Because our ELP experts are local to your community, they know how the earthquake insurance regulations work in your area and can tell you exactly what’s best for your unique needs.

Connect with an ELP today!