Should you purchase Earthquake Coverage? Direct damages due to Earthquakes are NOT covered under the standard homeowner’s policy. The answer for most people is a crystal clear ‘it depends.’
The first, most important and most obvious consideration is location. Do you live in an area prone to Earthquakes? If that answer is no, then you’re probably safe forgoing coverage. If the answer is yes, read on. If the answer is ‘I’m not really sure,’ then here’s a map of the USA’s geological ruminations this past week. The visual should give you a pretty good idea whether you live in a risk zone or not.
This map is available at all times for current data, by the way, just visit the Recent Earthquakes Page (HL http://earthquake.usgs.gov/earthquakes/recenteqsus/)
For those who live in high risk areas (yes, California, we’re talking to you), purchasing Earthquake Coverage is a very important option to consider. Remember that you don’t purchase insurance for things that are necessarily likely; you insure yourself against the unlikely financially devastating event.
Take life insurance, for example. The likelihood of a bacon-bringer passing prematurely is very small, and most families don’t expect to need it. However, they purchase coverage anyway because of the financial nightmare that would ensue IF it did happen.
Of course, there are always those who wouldn’t purchase auto insurance if it wasn’t mandated, or home insurance if they don’t have to; some people much just prefer to roll the dice. Some are wealthy enough to walk away from a destroyed home, and some have so little equity that it doesn’t make financial sense to insure against earthquakes.
But if you don’t consider yourself a member of the groups above, at least considering coverage is a wise idea.
So what does protection entail? That will depend on the conversation you have with your insurance provider. Coverage will vary state to state, but in high risk areas, both basic and expanded coverage is available, having made great strides in the past few years. In low risk areas such as my desk here in Massachusetts, a simple earthquake endorsement will cover damages due to earthquakes, landslides, volcanic eruptions, and other earth movements.
Best of luck in your decision!