The short answer is that property damage caused by the shaking movement of the earth is not covered by a standard homeowners insurance policy, although some subsequent damage may be eligible for coverage.However, you can still can buy earthquake insurance.In some cases, homeowners can add an earthquake endorsement to their home insurance policy, although "not every insurance company offers earthquake coverage," says Don Griffin, vice president of personal lines for the Property Casualty Insurers Association of America.
Unlike flood insurance, which is available from through FEMA (Federal Emergency Management Agency), earthquake insurance is offered by private insurance companies.
Earthquake insurance coverage
Earthquake insurance covers both the structure and the contents of a home. Homeowners decide how much insurance they want to purchase for each type of coverage.
"Generally, the structure coverage is more important because the more costly damage from an earthquake is usually in terms of cracks in the foundation rather than in damage to personal possessions," Griffin says.
Earthquake insurance also reimburses living expenses for homeowners while their property is repaired. Some insurance companies offer endorsements for outbuildings or swimming pools. In other cases, standard home insurance policies cover those items, says Griffin.
Griffin says earthquake policies and endorsements have deductibles that usually are set as a percentage of the home's replacement value from 1 percent to 10 percent. In the case of an endorsement, the earthquake deductible is separate from and in addition to the deductible on the home insurance policy.
The Insurance Information Institute says the entire Northwest U.S. is at high risk for earthquakes. Earthquakes are also a worry in several states along the New Madrid seismic zone within the central Mississippi River valley.
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