Earthquakes and insurance
Current home insurance policies generally include coverage for risks that may affect all policyholders, including fire, water main break or violent winds, and this regardless where they live. So what about earthquakes?
2 types of damages
Earthquakes can cause two kinds of damage:
- Damage from fire, explosion or smoke after the earthquake
- Damage resulting from the earthquake itself.
A number of insured already have coverage for damage caused by fire following an earthquake. For some, this coverage is included in their home insurance policy, for others, it is added to insurance policy through an endorsement.
However, few individuals are insured for loss resulting from an earthquake. Some mistakenly believe that the risk is covered under their home insurance policy. However, it isn't.
Every individual must assess his or her risk tolerance threshold or financial capacity to assume the consequences if such an event were to occur.
Coverage sold under an endorsement
Earthquake coverage is sold under an endorsement. The coverage is added to the home insurance policy.
If you want to protect yourself against this type of loss, you can purchase an endorsement to cover earthquakes. Check with your broker or insurer to determine the insurance amount as well as the deductible.
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