EARTHQUAKE Insurance Policy

Earthquake insurance is usually written as a supplement or endorsement to an existing homeowners or commercial insurance policy. The policyholder pays an additional charge for it. Though most Americans think of California when they think of earthquakes, about 5,000 earthquakes occur each year in dozens of states.

A typical earthquake policy covers damage or complete loss to a dwelling or building. It may cover contents. Depending on the policy, it may also pay for accommodations if the policyholder has to make temporary living arrangements. Some policies pay for damage to a garage. On the other hand, some policies do not pay for damage to a patio, for example. Consumers should read the policy carefully. Earthquake policies do not cover damages from flooding or tidal waves even if an earthquake causes either event.

Seismic maps can be used to determine the probability that a structure will be struck by an earthquake. Besides what is revealed by those maps, another factor affecting premiums is the composition of the home. Since a wood frame home is less susceptible to earthquake damage than a brick home, the premium for insuring it may be lower. Consumers have a choice of deductibles.