FAQ: How Expensive is Earthquake Insurance?

Posted in Home Insurance

September 18th, 2009

If you’ve recently learned that the area you live in, or are thinking of moving to, is a high-risk area for earthquakes, you may be thinking about acquiring earthquake insurance – and most importantly, how much it costs. It’s not always easy to find blanket prices for various insurance coverages because so many variables determine their rates. However, we can explore what you might expect to pay for earthquake insurance, and what variables affect your rates.

What You Might Expect to Pay

As mentioned previously, there are a number of variables to determine what you might pay for earthquake insurance. However, in general, you might pay anywhere from $.50 to $1.00 per $1,000 of replacement valuefor awood or brick home on the East Coast, which might add up to around $100 per year. On the other hand, if you live in the Pacific Northwest, you might pay $1 to $5 per $1,000 of replacement value for a wood or brick home, leaving you with a bill of anywhere from $300 to $1,000 per year (or more) depending on the value of your home.

In California, you can expect to pay the most. Many homeowners throughout the state might pay anywhere from $500 to $3,000 per year for their insurance because it is such a high-risk area.

Variables Affecting Your Rates

• Where you live. Your geographical region (i.e. East Coast vs. Midwest) can affect your rates for a couple of reasons. Some areas are more likely to be hit by earthquakes than others. And two, some areas are more likely to charge more than others for coverage.
• What your home is worth. Depending on the value of your home, you may have to pay more or less for your insurance than other people you know.
• How old your structure is. If you live in a brand new home, you may not have to pay as much for your coverage as someone who lives in a 100-year-old wood structure that may be prone to cracks in the foundation.

As you’re considering earthquake coverage options, you want to make sure to get enough to truly cover the replacement of your home. It’s always tempting to cut costs where you can, but ifa quake hits and leaves you with nothing but your money in the bank, you would hope that all you’d have to pay is for the deductible.