3 Common Misconceptions About Earthquake Coverage

3 Common Misconceptions About Earthquake Insurance

Learn what coverage you have (or don’t have) and how Earthquake Insurance could help.

#1 – My homeowners/renters/condo/business policy will cover the cost to repair damages and replace personal possessions.

Earthquake and flood damage are excluded under these policies unless a separate policy is purchased. If you don’t have the added protection of earthquake insurance, will you have enough to pay for repair and replacement costs out of pocket?

Think about the value of your assets and consider how you will pay to repair and replace these items if they are damaged during an earthquake. If you are a business owner, you should also consider how much it would cost to maintain your business in the event you have to close due to an earthquake, even if there is no damage to your property.

An earthquake policy will provide coverage for:


  • Loss of use (additional living expenses while the building is being repaired; i.e. hotel or rental home expenses, food & utility expenses)
  • Personal property
  • Property repairs and building code upgrades for homeowners and condo owners


  • Building
  • Business Equipment/Business Personal Property
  • Lost income
  • Ongoing expenses (i.e. wages/salaries, mortgage/lease, payments, etc.)
  • Optional contents coverage (i.e. valuable papers and records, electronic data processing)

#2 – Earthquake Insurance is too expensive so it’s not worth it for me. If there’s an earthquake, I can worry about it then.

For many years after the Northridge earthquake, earthquake policies were expensive and very inflexible. Now with additional deductible and coverage options from insurance companies, policies are more customizable than ever and can be designed to better fit your coverage and financial needs.

You may be surprised to hear that there are deductible options as low as 5% of the dwelling coverage limit, as well as options for separate personal property deductibles.

Are you most concerned about how you will pay for additional living expenses if you’re not able to live in your home or condo after an earthquake? You can focus on loss of use coverage with options from $1,500 up to $100,000.

Business Owners: How long can you afford to close your business unexpectedly?

If you are a business owner, there are also affordable options available to you that cover losses due to an earthquake. Imagine that you are are out of business for a week or two. You still have expenses to pay, such as bills and wages, even though you have no revenue coming in. Business interruption coverage options are a smart and affordable way to make sure your business is protected.

The ability to customize earthquake policies has made earthquake insurance a valuable product that is worth the investment.  There are options available such as the Quake Assist program through Arrowhead General Insurance for simple ways to protect your business.

#3 – The government will provide aid if I’m affected by an earthquake so I don’t need to worry about having money to rebuild.

Yes, the government will typically offer federal aid to those affected by natural disasters. However, keep in mind that the money will be in the form of loans, which you will need to pay back.

It is risky to rely on federal aid. You must meet their qualifications to apply and there is no actual guarantee that you will receive any payout. Be prepared to wait for weeks to hear back. If you are lucky enough to receive funds, they might not cover the costs that you need to repair and replace what you have lost.

If you have earthquake coverage, you will have faster access to funds to help you back on your feet.

It’s time to get serious about preparing for a major earthquake. Even The Los Angeles Times believes it may be time to rethink our stance on earthquake insurance (read the article here).

Having the foresight to invest in earthquake insurance will allow you the comfort of returning to normal life faster than someone without coverage.

Ask us about getting a complementary earthquake coverage assessment and we’ll help you prepare for tomorrow. Give us a call at (866) 459-3073 or fill out the form below to get started.

Thank you!