Earthquake Insurance
With so many natural disasters in the news, you may be wondering if your home or business is covered in the event of an earthquake.
While standard homeowners insurance policies cover most natural disasters, earthquakes are usually excluded.
Home owners and business owners should purchase a separate earthquake insurance policy if they live in an area which is at risk for earthquakes.
What is Earthquake Insurance?
Earthquake insurance is a type of property or homeowner’s insurance which covers damage caused by earthquakes.
It is important to note not all policies are the same, and coverage can vary significantly from one insurer to the next.
Obtaining an earthquake insurance policy is especially important for those living in areas at risk for earthquakes, such as high risk part of California.
With an earthquake insurance policy in place, you can rest assured knowing that your property is protected in the event of an earthquake.
What Does Earthquake Insurance Cover?
Coverage under an earthquake insurance policy typically includes damage to your home or business due to an earthquake. This can include damage to the structure of your home or business, as well as the contents inside.
In some cases, earthquake insurance may also cover temporary living expenses if your home or business is uninhabitable due to earthquake damage.
Your insurance policy will determine the limits of your coverage, so it is important to read through it carefully to understand what is and is not covered.
What Does Earthquake Insurance Not Cover?
As with any insurance policy, there are certain exclusions that apply to earthquake insurance.
Most policies will not cover damage caused by:
- landslides
- sinkholes
- mudslides
Additionally, earthquake insurance typically does not cover damage that occurs gradually, such as cracks in the foundation of your home or business.
Contact your insurance agent or company for clarification if you have concerns about what is covered under your policy.
Are There Policy Limits?
Yes, most earthquake insurance policies limit the amount of coverage they provide.
The amount of coverage you need will depend on your property’s value and the damage that an earthquake would cause. Most policyholders choose to purchase enough coverage to rebuild their homes or business in the event of an earthquake.
Your insurance agent can help you determine the right amount of coverage for your needs.
The risks of purchasing insufficient coverage can impact your finances and your ability to rebuild in the event of an earthquake, so it is important to purchase enough coverage to protect your property.
Is South Carolina At Risk for Earthquakes?
According to the South Carolina Department of Insurance, about 70% of earthquakes in South Carolina are located in clusters around three areas:
- Ravenel-Adams Run-Hollywood;
- Middleton Place-Summerville; and
- Bowman
Looking back in history, the earthquake of 1886 in Charleston registered 7.6 on the Richter Scale and was felt from Cuba to New York. Approximately 110 people were killed and damage estimates in 1886 dollars were about $5.5 million.
The forecast for a large earthquake somewhere in the Eastern United States with in the next 20 years is a 40-60% chance of a magnitude 6. (Earthquake Education Center, Charleston Southern University).
170 earthquakes occurred in South Carolina in 2000 alone—the strongest registered 2.7 on the Richter Scale and occurred in the Lake Jocassee area (University of South Carolina, South Carolina Seismic Network).
While the frequency of earthquakes in South Carolina is low, the potential for a severe quake is high. Most people don’t buy earthquake insurance, because they think it’s too expensive and an earthquake will never happen to them.
But in South Carolina, the entire state is considered to have a moderate to high risk for earthquakes.