Understanding Earthquake Insurance: What’s Covered and What’s Excluded?
As a resident of Oregon, I can’t shake the worry that a major earthquake could significantly impact my home, which is my biggest investment. Recently, I requested a quote for earthquake insurance and was taken aback to find that the premium exceeds the total cost of my bundled auto and homeowners insurance ($830/year). After getting just the quote, I asked for the policy details and found the information quite confusing. I’m hoping someone with insurance expertise can clarify the language regarding earth movement exclusions. Specifically, I’d like to understand the nuances of what constitutes an earthquake versus the broader category of earth movement. Just to note, my policy is through State Farm.
Here’s a breakdown of what I found in the coverage details:
Coverages and Deductibles
The Earthquake and Volcanic Explosion Endorsement covers accidental direct physical loss to property from an earthquake or volcanic explosion, provided the loss is caused directly and immediately by:
- Ground tremors
- Ground liquefaction
- Amplified ground motion
- Ground shock waves
Exclusions:
However, certain losses are explicitly excluded, including:
- Any earthquake or volcanic explosion that occurred before the endorsement’s effective date
- Earth movement, which involves the sinking, rising, shifting, expanding, or contracting of the earth—regardless of whether it is combined with water, sewage, or any other materials associated with the earth
Examples of earth movement exclusions include, but aren’t limited to:
- Earthquakes, unless specifically covered in the Additional Coverages section.
- Landslides, mudslides, or mudflows
- Sinkholes or subsidence
- Movement due to:
- Improper compaction
- Site selection
- Natural resource extraction
- Excavation
- Erosion
- Pressure from surface or subsurface earth or fill
- Any volcanic activity, outside of what’s detailed in the Additional Coverages
Deductible Information:
For losses resulting from an earthquake or volcanic explosion, the deductible is calculated as a percentage, specified in the Declarations, based on the Coverage A – Dwelling limit. This deductible will be deducted from the total loss amount and is the only deductible that applies to these specific claims.
Important Note: All earthquake or volcanic activities that occur within a 168-hour period are considered a single loss for deductible purposes.
If anyone can help demystify these exclusions further, I would greatly appreciate it!
It sounds like you have some valid concerns regarding earthquake insurance, especially living in a region like Oregon that is seismically active. Let’s break down the confusing language surrounding the exclusions in your policy regarding “earth movement.”
The key distinction here is between damage specifically caused by an earthquake (or volcanic explosion) and damage caused by general earth movement, which is not covered under this endorsement. Here’s a clearer explanation of each:
Ground shock waves (the waves produced by an earthquake)
Excluded Earth Movement: The exclusions specifically state that various forms of earth movement (even if they may occur during or after an earthquake) are not covered. This includes:
This differentiation is crucial because it means if a quake occurs and leads to a landslide or other types of earth movement, those subsequent damages might not be covered. The policy aims to clarify that while you can claim damages directly arising from an earthquake itself, any secondary effects categorized as general earth movement are excluded.
Regarding the deductible, it usually applies as a percentage of your home’s coverage limit to the earthquake damages, which can mean you might need to cover a significant portion of the costs before insurance kicks in for a claim.
If you feel uncertain about the details, it might be beneficial to have a conversation with your insurance agent or consider consulting a local insurance adjuster who can further explain your policy and what specific situations you may encounter.