After Napa Jolt, Quake-Proofing Your Homeowner’s Insurance

AS Napa County, Calif., recovers from the earthquake that jarred the area last weekend, many homeowners may be wondering whether they should buy special earthquake insurance.
“You better believe there’s a lot of people who wish they had it,” said Amy Bach, executive director of United Policyholders, a nonprofit consumer group focusing on insurance. Ms. Bach spent time early this week advising those affected by what is now officially known as the South Napa earthquake.
Standard homeowner’s insurance policies generally don’t include protection for earthquake damage to a home and belongings. That means you have to purchase extra coverage, which may be expensive if you live in a high-risk area. The policies also have high deductibles compared with other types of insurance, which may give potential buyers pause.

“For many, the damage incurred by the earthquake may never reach the deductible amount,” noted a 2012 report from the National Association of Insurance Commissioners’ policy research arm.
Nationally, the proportion of Americans with quake coverage on their homes has been falling, according to research from the Insurance Information Institute, an industry-funded group. About 7 percent of Americans with homeowner’s policies said they had earthquake insurance, down from 10 percent in 2013 and 13 percent in 2012, the institute found. Among homeowners earning $100,000 or more, 11 percent said they had quake coverage, while just 2 percent of those earning less than $35,000 did. Often, interest in coverage rises after a significant quake, said Loretta Worters, a spokeswoman for the institute.
Only about 10 percent of California residents have an earthquake policy, and just 6 percent carry one in Napa County, according to the California Earthquake Authority, the quasi-public agency that provides most policies in the state through its member insurance companies.
The average earthquake premium for homeowners in California is about $800 a year, said Glenn Pomeroy, chief executive of the earthquake authority. But it can be much higher, depending on how close you live to a known fault line and other factors.
California Earthquake Authority policies commonly have a deductible of 10 or 15 percent of a home’s replacement value. So if your home were insured for $400,000 and your deductible was 10 percent, damage would have to total at least $40,000 before the policy paid out, Mr. Pomeroy said. If your home were destroyed, he noted, you wouldn’t need to come up with the deductible out of pocket to receive a claim payment. Some policies offer a separate deductible for your belongings.
Other parts of the country are also vulnerable to earthquakes, although deductibles can be lower outside quake-prone California. The United States Geological Survey this year released updated seismic maps showing areas of relative hazard. Regions of elevated risk include an area encompassing southeastern Missouri and northeastern Arkansas and another in South Carolina. And lower risk doesn’t mean no risk: In 2011, for instance, parts of the East Coast were jolted by a 5.8-magnitude earthquake centered in Virginia.
Here are some questions about earthquake insurance:
■ How should I decide whether to buy earthquake coverage?
Ms. Bach advises consumers to check the U.S.G.S. map to see if they’re in a high-risk area The 16 states at highest risk, according to the government, are Alaska, Arkansas, California, Hawaii, Idaho, Illinois, Kentucky, Missouri, Montana, Nevada, Oregon, South Carolina, Tennessee, Utah, Washington and Wyoming.) They should also weigh factors like the details of construction. For instance, she noted, a two-story home built over a garage might be at greater risk than a single-story home.
As with any sort of insurance, you should shop around, she said. Recently, when the premium on her own earthquake policy rose, she sought additional quotes and found a policy with a lower deductible. There are also programs available in California that let people buy additional insurance that can lower the deductible.
■Can I buy earthquake insurance if I don’t own my home?
If you rent, you can usually add earthquake coverage to your renter’s insurance policy to cover damage to belongings — and premiums are typically much less expensive than homeowner’s policies. In California, for instance, renters can buy earthquake coverage for $120 a year, Mr. Pomeroy said.
■Won’t the federal government cover losses from earthquakes?
Federal disaster grants — available if an area is declared a federal disaster area — are often limited in size and are reserved mainly for those with financial need based on their incomes, Ms. Bach said. Low-interest loans may be made available but, of course, must be repaid.