Earthquake insurance serves the purpose of providing compensation to policyholders to assist in dealing with the expense of repair or replacement of structures and personal property effected by an earthquake. It will not pay out for losses associated with other perils, such as fire, floods, or severe weather. This type of coverage will often have a large deductible payment that is determined by various factors.

The coverage can be obtained from various insurance companies and usually will cover damage or destruction to the covered structure and personal property within. Usually the compensation for personal property losses are specifically determined for individual items as opposed to a number set for all of one’s possessions. This is due to the fact that many personal items, such as furniture, will often come through a quake intact. This can benefit both the provider and the insured as it can help in keeping costs down.

Earthquake insurance coverage amounts are normally determined based on one’s property value. For example, a $250,000 home can be covered for the entire amount, more so if it is in a higher-risk zone. In this case, the deductible will be a pre-determined percentage of the total coverage, often being 15 percent. Coverage exceptions will often include valuable jewelry and collectables, landscaping improvements, swimming and structures other than the main residence that sit on the property, such as a garage or storage shed.