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Does homeowner's insurance cover earthquakes?

Though the most famous may be located in California, fault lines run throughout the Pacific Northwest. This means that earthquakes could strike at any time. However, if you own property in Washington, you may not feel overly concerned about the possibility, trusting in your homeowner's insurance to protect your investment.

Nevertheless, you may be less protected than you think. According to KOMO News, most standard insurance policies do not cover damage due to earthquakes. Nor do they typically cover damage from a number of catastrophes known to strike in the Northwest, including sinkholes, landslides or floods. 

If you do not have earthquake coverage as part of your standard insurance policy, you essentially have two options apart from doing nothing and hoping for the best. You can apply for government disaster assistance after an earthquake or other catastrophe strikes, or you can purchase extra insurance on your home that specifically covers earthquakes. 

Each of these options has its downside. Government assistance typically comes in the form of a loan that you eventually have to pay back. Even then, it may only cover a portion of your repair costs. On the other hand, earthquake insurance often involves hefty deductibles of 10% to 25% of the insured value of your structure. The deductible is the portion of your repair costs that you have to pay out of your own pocket. Not only that, but an extra earthquake insurance policy can increase your annual home insurance costs by $200 to $2,000. 

Some homeowners are either unable or unwilling to make the extra expenditure. Others believe it is a worthwhile price for the peace of mind that it brings. The best choice of action for you may depend on your individual situation. 

The information in this article is not intended as legal advice but provided for educational purposes only.

 

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