insurance

Earthquake Insurance

A specialized type of property insurance that covers damage to buildings and personal property caused by earthquakes. Most standard homeowners insurance policies exclude earthquake damage, making this separate coverage essential in seismically active areas.

Example

“After the recent tremors in California, many homeowners realized their standard policies didn't cover earthquake damage and purchased separate earthquake insurance.”

Memory Tip

Remember 'SHAKE and BREAK' - earthquakes shake the ground and break your home, but standard insurance won't cover the break without separate earthquake coverage.

Why It Matters

Earthquake damage can result in hundreds of thousands of dollars in repair costs that aren't covered by standard homeowners insurance. Without earthquake insurance, property owners in seismic zones face potential financial devastation from a single event.

Common Misconception

Many homeowners assume earthquake damage is covered under their standard homeowners policy, not realizing it requires separate coverage. Additionally, people often don't understand that earthquake insurance typically has very high deductibles, often 10-25% of the home's value.

In Practice

John owns a $500,000 home in Los Angeles and purchases earthquake insurance with a 15% deductible for $800 annually. When a 6.2 earthquake causes $200,000 in damage to his home, he must pay the first $75,000 (15% of $500,000) out of pocket, while his earthquake insurance covers the remaining $125,000. Without this coverage, John would have faced the entire $200,000 repair bill himself.

Etymology

Combines 'earthquake' from Old English 'eorthe' (earth) and Middle English 'quake' (to shake), with 'insurance' from Latin 'securus' meaning secure or safe.

Common Misspellings

earthquke insuranceearthquake insurenceearth quake insuranceearthquake insureance

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