What earthquake insurance covers

Dwelling coverage pays to repair or rebuild the house after shaking damage, usually at the same limit as the home policy, and includes the foundation, which some home policies leave out. Masonry veneer is often excluded or limited by default, with an option to buy it back; on a brick home that exclusion can remove a large part of the claim, so it is the first line to read on any quote. Aftershocks within a set window are treated as a single event, so one deductible applies to the sequence.

The deductible is written as a share of the dwelling limit, not as a flat amount, and it is the reason earthquake coverage is misunderstood. Suppose a home is insured for $400,000 with a deductible of ten percent: the first $40,000 of dwelling damage is the owner's, and a lower deductible of five percent would leave $20,000 with the owner at a higher premium. Contents and other structures sometimes carry their own share-based deductible and sometimes the dwelling deductible applies once across every coverage; the form decides, and the difference matters.

The coverage is built for the loss that ends a home, not for cracked drywall. A household that could absorb a modest repair but not a rebuild should choose the higher deductible and the lower premium, and put the savings into retrofitting.

Detached garages, sheds, walls and fences are covered under other structures, usually at a limited share of the dwelling limit. Contents pays for furniture, electronics, dishes and everything else thrown, broken or crushed, at replacement cost or actual cash value depending on the form. Breakable items such as china, glassware and artwork are commonly excluded unless scheduled, and some forms exclude anything that fell from a shelf rather than being damaged by the building itself, which is worth asking about before buying.

Loss of use pays hotel, rent and added living costs while the home is uninhabitable, and after a regional quake that period runs long because every contractor is booked. Building code upgrade coverage pays the added cost of rebuilding to today's seismic code rather than the code the house was built under, which for a mid-century home on the Wasatch Front can be a large share of the rebuild. Some forms include an amount by default and others require it to be added.

An endorsement on the home policy is simpler and often cheaper, uses the same limits and renews with the home policy, but the carrier can withdraw it and the terms are the carrier's. A standalone policy from a specialty carrier can offer lower deductibles, higher code-upgrade limits, and coverage on a home whose primary carrier does not write earthquake, and it survives a change of home carrier. In Utah the standalone market is deep enough that the two are worth pricing against each other.