In contrast to homeowners insurance, renters insurance covers damage to a tenant’s personal property through theft, fire, or any other covered damage. These circumstances are known as “covered perils.” However prevalent, natural disasters such as wildfires or floods are often not included as perils in average renters policies. The same is true of earthquakes.
Luckily, for those who live along the ring of fire or other earthquake-prone areas of the US, earthquake insurance policies and riders (supplemental insurance add-ons) exist to cover your possessions in the event of a tremble.
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Does Renters Insurance Cover Earthquakes?
Standard renters policies pay a tenant to replace their items due to theft or damage. A renters policy also protects a tenant from litigation. Renters earthquake insurance covers a tenant, except this policy would replace items damaged in an earthquake.
Renters are not always required to purchase earthquake insurance when moving into a new space. However, it’s not uncommon for the property owner to require it as a condition to move in. However, earthquake insurance might be recommended depending on the home’s location. Purchasing separate earthquake coverage or adding an endorsement to an existing renter’s policy is the only way to gain reimbursement for items damaged due to a quake.
What is Earthquake Insurance?
Earthquake insurance covers a renter’s belongings if they’re damaged or lost due to an earthquake. Coverage also applies to items damaged in other ways that stem from an earthquake. While earthquake coverage is readily available, it too activates in specific circumstances.
What Does Renters Earthquake Insurance Cover?
Renters earthquake coverage, and renters coverage more broadly, typically cover one’s possessions if they are damaged or destroyed by a covered peril, in this case, an earthquake.
For example, if an earthquake causes televisions to fall off the wall and crush a coffee table, the policy will pay to replace both the TV and the coffee table. Similarly, if liquefied mud drains into the apartment and ruins all of a tenant’s area rugs, the policy would pay to replace the rugs.
The standard earthquake endorsement or policy also includes payment for loss of use. Loss of use coverage pays for a tenant to live elsewhere if the earthquake renders their home unlivable. Another classic feature of earthquake insurance is debris removal. This coverage would pay to remove fallen trees, boulders, rocks, and other debris from the rental property. Personal property is included, which would pay to replace or repair items damaged in the quake.
Perils Covered by Earthquake Insurance
There are a variety of perils covered by earthquake insurance outside of the event itself. One standard covered peril is damage to possessions from liquefaction. Liquefaction occurs when soil liquefies and fills a space, a common occurrence after a severe earthquake. Other covered perils included as part of earthquake insurance include landslides and sinkholes. Those mentioned are not the full extent of earthquake peril coverage options available. To get the full breadth of coverable perils available, check with your potential future insurance providers while shopping around.
What Doesn’t Renters Earthquake Insurance Cover
There are some exceptions to personal property coverage in the event of an earthquake.
For example, an earthquake endorsement wouldn’t repair car damages if one’s auto is damaged in a trembler.
One notable coverage omission would be damage to the rented property. Because the landlord owns the home’s structure, a renter’s earthquake policy would only cover the items damaged, not the structure itself. Another caveat in earthquake policies for renters is flooding. These policies do not cover any flooding or anything damaged in a way unrelated to earth movement.
How Much Earthquake Insurance Do I need?
As a tenant, you’ll want enough coverage to replace your belongings completely. The most efficient way to decide how much coverage you’ll need is to create an inventory of your items. You can include the approximate date of purchase and how much you paid for the item to be even more thorough. You can also walk through your apartment and make a video of your items to keep for your records. You’ll also need to decide how much it would cost to relocate if the home is too damaged to live in after the earthquake.
How Much Does Earthquake Insurance Cost
In general, earthquake insurance for renters is much less expensive than it is for homeowners. Insurance companies adjust prices accordingly, as they understand that the renters policy will replace personal property while the homeowners policy will also cover the structure.
The deductible for your coverage works a little differently than it would for the traditional renter’s policy. While a traditional policy has a flat fee deductible, i.e., $200, a renters earthquake policy deductible is usually between 5% and 25% of the overall payout amount. For example, consider a renter with $50,000 in rental earthquake coverage. They would be responsible for paying between $2,500 and $12,500 of the $50,000 while the insurance company covers the rest.
What To Do if You Experience Earthquake Damage
Insurance companies typically process covered damages 7-15 days after the original earthquake in a single claim. This period allows the insurer time to include all fallout from the earthquake and aftershocks into a single earthquake claim. Additionally, it provides some time for a recovery crew to find further damage missed immediately after the event.