Does homeowner’s insurance cover earthquakes?
Nope. Well not by default anyways. Allow us to explain.
On December the 12th, 2018 two small earthquakes rumbled through Middle Tennessee. This occurred in Decatur, TN – which is roughly 100 miles from our main office in Mt. Juliet. While West Tennessee is much more in tune with earthquakes, here in Middle & East Tennessee – they are much more rare.
So that brings us to the question – is your home covered if it is damaged by an earthquake.
As we mentioned above, by default, the answer is no. Most home policies today are written on a HO3 form. A HO3, when talking about the dwelling, is written so that all loss types are covered, UNLESS the policy specifically excludes them. Earth movement, such as that from an earthquake or even foundation settling, is excluded from coverage. This means there is no coverage for the dwelling without an earthquake endorsement.
Most carriers will allow you to add earthquake coverage to your home policy via an endorsement. This endorsement ranges in price by carrier but can be as low as $30 annually to several hundred dollars. This all depends on the carrier, location, and earthquake risk. These endorsements extend coverage and add an earthquake deductible to the policy – usually a percentage such as 10%, 15%, 20%, etc. These deductibles are for the total loss, and should be taken very seriously when obtaining earthquake coverage.
Example: If you have earthquake coverage with a 15% deductible, and you suffer an earthquake loss of $100,000, your deductible would be $15,000.
You should ALWAYS consult with your agent and policy to verify if coverage is applicable or available to you. If you with to speak with one of our agency regarding earthquake insurance, you can do so by following this link.