Earthquake insurance: To buy or not to buy

When it comes to home insurance in the Northwest, I am frequently asked if one should buy earthquake insurance or not. Yes, if you can afford extra premium for the earthquake coverage for simple reason that if your house is damaged in a major earthquake, you at least have the peace of mind that your home will be indemnified. Next question is what is the chance that a major earthquake (7.0 and up) will happen in the northwest in the near future. Answer is that no one knows for sure but the last major earthquake happened in the 1700 and measured over 8.7 magnitude. This is over 300 years ago but smaller earthquakes have occurred in the recent history. Geologist believe that major earthquakes in the northwest happen every 300 years, so probability of a big earthquake happening in our life time is high.  

What is the different about earthquake Insurance? 

Earthquake deductible is not the same as your home insurance deductible. Earthquake deductible is percentage of your coverage amount. The least minimum deductible offered by most insurance carriers is 10% of the dwelling amount but one can get higher deductible amount. Example if you have a home dwelling coverage amount of $300,000.00, your 10% deductible amount will make your earthquake deductible $30,000.00. If you have personal property coverage for $150,000, your earthquake deductible will be $15,000.00. In order for the insurance to pay out any claims to your home due to the earthquake, you have to have substantial damage to your home before they pay out. 


What will my earthquake premium be? 

Expect to pay at least 30% to 50% on top of your regular home premium.