Many homeowners still assume their homeowners insurance policy automatically covers earthquakes. The problem? Standard homeowners and renters policies exclude earthquake damage, according to the NAIC. If you only learn this after the ground starts shaking, you could be on the hook for a large and unexpected repair bill.
If you happen to live in an earthquake-prone area, this should raise some serious questions: Do I need earthquake insurance? Is earthquake insurance worth it? How much does earthquake insurance cost? Updated hazard maps like the USGS National Seismic Hazard Model can help you gauge local risk.
According to the Federal Emergency Management Agency (FEMA), earthquakes are estimated to cost the U.S. nearly $6.1 billion annually (2017). Adjusted to today’s prices using the BLS CPI inflation calculator, that’s roughly $7.7–$8.0 billion per year in direct building damage. For global context, model-based estimates from the Global Earthquake Model put average annual direct losses worldwide on the order of ~US$80 billion, and recent years have seen single events drive realized earthquake losses into the tens of billions globally, as noted in Munich Re’s 2024 natural catastrophe review. A lot of that total is the cost of damage to residential structures and property. Earthquake insurance may be able to help protect you and your family from footing a portion of that bill from this natural disaster.
What Does Earthquake Insurance Cover?
The exact coverage you get from earthquake insurance will depend on the provider you choose and the details of your plan. That being said, most earthquake insurance covers the damage costs caused by an earthquake and any aftershocks. Many plans cover the cost to rebuild, personal property damage, emergency repairs, and loss-of-use coverage. Optional add-ons like building code upgrade and certain breakables coverage are available in programs such as the California Earthquake Authority (CEA) and many private stand-alone policies. Deductibles are typically percentage-based (commonly 5%–25%). Note that standard homeowners policies generally exclude earthquake but often cover fire following an earthquake, while tsunami and other flooding require separate flood insurance through FEMA FloodSmart and related guidance from the Insurance Information Institute.
Should I Get Earthquake Insurance?
The answer to whether earthquake insurance is worth it depends on several different factors, including your financial situation (what you can afford), how earthquake-prone the area you live in is, and the value of your property, house, and belongings. Use authoritative resources such as the USGS hazard model and state guidance (e.g., Washington OIC, Oregon DFR) to assess risk and choose appropriate limits and deductibles.
If you’re unable to afford the higher premiums that come with earthquake insurance, it’s probably not something you should or can get. If you can afford the premiums, you need to weigh the risk versus the protection by looking at your chances of an earthquake and what the potential damage cost would be. Remember that earthquake deductibles are usually percentage-based (often 5%–25%), so plan for some out-of-pocket costs even with insurance.
When Not to Get Earthquake Insurance
While the only way to be truly protected from the costs of earthquake damage is to get earthquake insurance, there are situations where it might not be the best move for you. First, if you live in an area that’s not prone to seismic activity, you could consider foregoing coverage. Second, if you feel the cost of the insurance is not worth the risk it mitigates, it might not be the right fit. Condo owners should check whether the HOA carries an earthquake master policy and whether you need loss-assessment coverage; tsunami and other flooding require separate flood insurance.
Areas with the Most Seismic Activity
How Much Does Earthquake Insurance Cost?
According to insurance company Lemonade, you may see figures citing a nationwide “average” around a few hundred dollars, but authoritative sources stress there is no single national average because prices vary widely by state, ZIP code, construction, coverage limits, and deductible. Current market guidance from the CEA, the Insurance Information Institute, and state regulators such as Washington and Oregon shows typical deductibles of 5%–25% and premiums that can range from the low-hundreds to several-thousand dollars per year. The actual rate you pay depends on where you live, how earthquake-prone the area is, the type of home you have, the value of your house and belongings, and the level of coverage you want.
For example, in California (the highest-risk and largest market), overall CEA policyholder premiums are commonly in the low–$1,000s per year, with many single-family homes in higher-hazard ZIP codes paying roughly $1,200 to $2,500+ depending on limits and deductible; entry-level policies in lower-hazard areas can be below $1,000. In the Pacific Northwest (Washington and Oregon), many wood-frame homes see premiums from several hundred dollars to around $1,000+; in the central U.S. (New Madrid region), premiums are often in the low-hundreds for many frame homes with moderate limits; Alaska and Hawaii frequently fall in the high-hundreds to low-thousands. See CEA, Triple-I, Washington OIC, and Oregon DFR for current context.
How deductibles work
Your deductible is the amount of damage costs you’re responsible for, even with insurance. With earthquake insurance, deductibles tend to be considerably higher than with other types of coverage. Unlike many other policies, earthquake deductibles are usually a percentage of the coverage limit (not the amount of the loss) and commonly fall in the 5%–25% range.
The average deductible tends to be between 15% and 20% on many earthquake policies. What does this mean for you? If your dwelling coverage limit is $300,000 and you have a 15% deductible, your deductible is $45,000 per event. If a covered quake causes $100,000 in structural damage, the insurer pays the covered amount above your deductible, and you’d be responsible for the first $45,000 out of pocket. Some policies apply separate percentage deductibles to dwelling, contents, and loss of use—check your form and see guidance from the Insurance Information Institute and the CEA.
How Do I Get Earthquake Insurance?
When it comes to getting earthquake insurance, you’ve got several options to consider. The two main ways to get coverage are to add an endorsement to your existing homeowner’s insurance policy or purchase a policy independently. In California, many insurers offer access to the California Earthquake Authority (CEA). Each option comes with its own set of pros and cons.
When you purchase earthquake insurance as an endorsement on your existing policy, the process is much more streamlined. You’re working with a company you’re already doing business with and have already vetted for your home insurance needs. Availability can be limited in higher-risk areas, and options may be less configurable than with stand-alone policies, but bundling can be convenient. Check for waiting periods and post-event moratoriums in your state; regulators like Washington OIC explain these details.
By shopping elsewhere for your earthquake insurance, you give yourself the opportunity to get the best deal possible without feeling tied down to one company. However, you’re going to be working with a new insurer that you don’t have a history with. This will require you to do additional research to make sure the company is one worth working with. In California, compare private stand-alone options with the CEA, and in all states, get multiple quotes and test different deductible levels (e.g., 10%–25%) to balance price and protection.
