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| Earthquake Awareness and Preparedness |
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How to Decide on Earthquake Insurance?
A wise decision on earthquake insurance is crucial if you live in a region of seismic activity. My family and I
survived the 1995 Kobe Earthquake because I decided to live in a relatively new reinforced concrete
apartment building although the rent was higher than traditional Japanese wooden houses. The three
story main building stood still after the earthquake except an extension that partially collapsed, while many
of the surrounding traditional houses completely collapsed. However, the apartment contents were
damaged including the refrigerator, a microwave, and a large TV. The answers to the following questions
may help you to decide if earthquake insurance is right for you:
The USGS earthquake maps below show the peak acceleration (PGA) with 2% probability of exceedance in
50 years as a ratio of the acceleration due to gravity (g) at the elevation of the base rock, which will probably
be amplified to the ground surface at your home during an earthquake. Earthquake insurance would be
beneficial at seismic zones exceeding 0.35g for Western United States (WUS) and 0.43g for Central and
Eastern United States (CEUS), which are represented by the colors: dark brown, brown, red and orange.
Detailed rock PGA for some states and regions are also shown below.
A wise decision on earthquake insurance is crucial if you live in a region of seismic activity. My family and I
survived the 1995 Kobe Earthquake because I decided to live in a relatively new reinforced concrete
apartment building although the rent was higher than traditional Japanese wooden houses. The three
story main building stood still after the earthquake except an extension that partially collapsed, while many
of the surrounding traditional houses completely collapsed. However, the apartment contents were
damaged including the refrigerator, a microwave, and a large TV. The answers to the following questions
may help you to decide if earthquake insurance is right for you:
 | Do you know the plausible earthquake hazards at your home? | |
| How much of your home investments you are willing to put at risk? | |
| How much would it cost to repair or rebuild your home? | |
| Can you afford paying the mortgage while also paying to repair or rebuild your home? | |
| Do you have a line of credit on your home? How much home equity do you have? Can you afford | |
| losing your home equity? | ||
| How much would it cost to replace your household expensive possessions (furniture, computers, | |
| HDTV’s, refrigerators, arts, etc) if damaged or destroyed? | ||
| How much would temporary accommodations cost if you cannot live in your home after the | |
| earthquake? |
The USGS earthquake maps below show the peak acceleration (PGA) with 2% probability of exceedance in
50 years as a ratio of the acceleration due to gravity (g) at the elevation of the base rock, which will probably
be amplified to the ground surface at your home during an earthquake. Earthquake insurance would be
beneficial at seismic zones exceeding 0.35g for Western United States (WUS) and 0.43g for Central and
Eastern United States (CEUS), which are represented by the colors: dark brown, brown, red and orange.
Detailed rock PGA for some states and regions are also shown below.
| More information about Earthquake Insurance in |
| An entirely new chapter on 'Earthquakes and Finance' |
| The author is an adjuster and insurance expert |
Earthquake Insurance
The potential for earthquakes exists almost everywhere in the United States. Single-family homes built
before the 1980’s are most-likely to suffer earthquake damage because they were not designed nor
constructed according to modern building codes. If you live in an area of seismic activity and own your
home, it is your biggest financial asset. You have worked hard to secure your piece of the American Dream
to become a homeowner. Your assets and investments made in home contents and personal
possessions may be at risk when an earthquake strikes your area because your home will have some
level of nonstructural and structural damage. Most of the property damage will end up being paid for by you,
while still responsible for existing personal debt like mortgage, auto loans and credit card payments. Why?
The potential for earthquakes exists almost everywhere in the United States. Single-family homes built
before the 1980’s are most-likely to suffer earthquake damage because they were not designed nor
constructed according to modern building codes. If you live in an area of seismic activity and own your
home, it is your biggest financial asset. You have worked hard to secure your piece of the American Dream
to become a homeowner. Your assets and investments made in home contents and personal
possessions may be at risk when an earthquake strikes your area because your home will have some
level of nonstructural and structural damage. Most of the property damage will end up being paid for by you,
while still responsible for existing personal debt like mortgage, auto loans and credit card payments. Why?
Because homeowners insurance does not cover earthquake damage to your home or its contents but
covers fire and water-flood damage due to burst gas or water pipes during earthquakes, while your
vehicles are also not covered unless you have a comprehensive auto insurance policy. In the meantime,
the federal disaster relief programs are in the form of low-interest loans or FEMA disaster grants, both are
designed to help you get partly back on your feet but not to replace everything you lose. Earthquake
insurance that includes contents insurance is an option to effectively manage the potential costs of
destructive earthquakes covering repairs to your home structure, replacement of its contents, and much
more!
The standard earthquake insurance policy is designed to provide basic protection against earthquake
damage covering the home structure, home contents and personal possessions, which are subject to a
15% standard deductible, with some limitations and exclusions. Optional coverage of your choice may also
be available for applying 10% deductible instead of 15%, upgrading to current building codes, or
increasing the coverage value of your home contents, personal possessions, or loss of use. Of course, the
insurance premium will increase accordingly.
The states of California, Washington, Missouri, Tennessee, Oregon, Illinois, New York, Kentucky, Florida,
and Indiana are the top 10 largest markets for earthquake insurance coverage. Earthquake insurance
premiums differ widely by location, insurance company, and construction materials of your home. Older
buildings cost more to insure than newer ones. Wood frame construction benefits from lower rates than
unreinforced masonry construction as they tend to withstand earthquake forces better. Regions are graded
on a scale of 1 to 5 based on the research results of earthquake prediction by the US Geological Survey
(USGS), which is reflected in insurance rates offered in those areas. A wood frame house in the Pacific
Northwest costs $1-3 per $1,000 worth of coverage but less than $0.50 on the East Coast, while an
unreinforced masonry home costs $3-15 per $1,000 in the Pacific Northwest but $0.60-0.90 in New York.
covers fire and water-flood damage due to burst gas or water pipes during earthquakes, while your
vehicles are also not covered unless you have a comprehensive auto insurance policy. In the meantime,
the federal disaster relief programs are in the form of low-interest loans or FEMA disaster grants, both are
designed to help you get partly back on your feet but not to replace everything you lose. Earthquake
insurance that includes contents insurance is an option to effectively manage the potential costs of
destructive earthquakes covering repairs to your home structure, replacement of its contents, and much
more!
The standard earthquake insurance policy is designed to provide basic protection against earthquake
damage covering the home structure, home contents and personal possessions, which are subject to a
15% standard deductible, with some limitations and exclusions. Optional coverage of your choice may also
be available for applying 10% deductible instead of 15%, upgrading to current building codes, or
increasing the coverage value of your home contents, personal possessions, or loss of use. Of course, the
insurance premium will increase accordingly.
The states of California, Washington, Missouri, Tennessee, Oregon, Illinois, New York, Kentucky, Florida,
and Indiana are the top 10 largest markets for earthquake insurance coverage. Earthquake insurance
premiums differ widely by location, insurance company, and construction materials of your home. Older
buildings cost more to insure than newer ones. Wood frame construction benefits from lower rates than
unreinforced masonry construction as they tend to withstand earthquake forces better. Regions are graded
on a scale of 1 to 5 based on the research results of earthquake prediction by the US Geological Survey
(USGS), which is reflected in insurance rates offered in those areas. A wood frame house in the Pacific
Northwest costs $1-3 per $1,000 worth of coverage but less than $0.50 on the East Coast, while an
unreinforced masonry home costs $3-15 per $1,000 in the Pacific Northwest but $0.60-0.90 in New York.
| Peak Rock Acceleration for Central and Eastern United States (CEUS) |
| Peak Rock Acceleration for Western United States (WUS) |
| Peak Rock Acceleration for Washington and Oregon States |
| Peak Rock Acceleration for Utah State |
| Peak Rock Acceleration for New Mexico State |
| Peak Rock Acceleration for Eastern United States including Charleston Area in South Carolina State |