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September 6, 2023

Earthquake insurance: What does it cost and is it worth it?

by Sanda Ljubovic

An earthquake can cause expensive damage to your home when it happens. If you live in an earthquake-prone area, like San Diego, you may want to consider obtaining earthquake insurance to protect you should the worst happen. In this article we’ll take a look at the value of earthquake insurance and whether or not getting the additional coverage might be right for you.

Earthquake Insurance Value

What is Earthquake Insurance?

Earthquake insurance provides coverage for your home in case an earthquake causes damage to it. Your basic homeowners policy does not cover earthquake damage. You must purchase a separate insurance policy, or you will be responsible for all the costs to repair your home and replace your personal belongings. California residents can purchase earthquake insurance policies through their homeowners insurance provider. 

What does Earthquake insurance cover?

A typical earthquake insurance policy consists of three parts.

    • Dwelling coverage
    • Personal property coverage – replacement cost for damaged personal items such as TV, furniture, etc.
    • Additional living expenses – this will pay for your temporary living while your home is being fixed.

How much does earthquake insurance cost?

The average cost of earthquake insurance is about $850 per year, according to AAA. Rates and policies vary depending on your home’s location, age, cost to rebuild, and your deductible.

To help determine earthquake insurance value related to cost, use the California Earthquake Authority (CEA)’s free calculator to estimate what your premium would be.

Do I need earthquake insurance?

In California, which is an earthquake prone area, only 10% of homeowners are insured. According to the California Earthquake Authority, San Diego has 75% probability of one or more 7.0+ quakes striking at any moment.

Before you make your final decision, ask yourself the following questions:

    • Can I afford to repair or rebuild my home?
    • Can I afford to live somewhere else until my home is fixed, while still paying for my mortgage?
    • Can I afford to lose all my belongings?

Given the potential cost to repair the price of earthquake damage, insurance might be an easy expense to justify. Also, those of us living in San Diego with a high probability of experiencing a severe earthquake will likely sleep much better at night knowing that we are covered should the worst happen. It could be costly, and you may not ever end up needing it, but I don’t think anyone who has gone through a disaster regretted having too much insurance.

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