Does Auto Insurance Cover Earthquakes?

Earthquakes can cause a lot of damage to your home and your belongings. You may even have to move out of your home while it is repaired or rebuilt. But does auto insurance cover earthquake damage?

Yes, car insurance covers earthquake damage—but only if you have comprehensive coverage included in your policy. Comprehensive coverage fills the gaps left by collision coverage, protecting your vehicle from weather events and natural disasters. So, if you live in an area prone to earthquakes, it's a good idea to invest in comprehensive coverage.

It's important to note that comprehensive coverage is relatively inexpensive, with top insurance companies offering it for about $13 a month. However, filing a claim may increase your auto insurance rates. Therefore, it's recommended to file a claim only if you can't pay for repairs yourself.

Comprehensive coverage is required for earthquake damage

Comprehensive Coverage for Earthquake Damage

Comprehensive coverage is an optional add-on to your auto insurance policy that covers damage to your vehicle from events other than a collision. This includes damage caused by animals, weather-related incidents, theft, vandalism, and acts of nature like fires and floods. Earthquake damage to your vehicle is covered by comprehensive insurance.

Comprehensive coverage fills the gaps left by collision coverage, protecting your vehicle from a range of events and natural disasters. In addition to earthquake damage, comprehensive insurance covers:

• Animal damage
• Weather-related incidents (e.g., hurricanes, tornadoes, floods)
• Theft
• Vandalism
• Falling debris
• Acts of nature, such as fires and floods

The cost of comprehensive coverage depends on the value of your vehicle. The higher the value, the higher the premium. On average, comprehensive coverage costs around $13 per month, with some companies offering cheaper rates. It's worth noting that filing a comprehensive claim may increase your auto insurance rates, so consider whether you can pay for repairs yourself before filing a claim.

While comprehensive coverage is not a legal requirement, it is highly recommended if you live in an area prone to natural disasters like earthquakes. Additionally, if you have a car loan or lease, your lender may require you to carry comprehensive coverage to protect their investment.

Comprehensive coverage is relatively cheap

Comprehensive coverage is an optional form of car insurance that covers damage to your vehicle from non-collision events, such as natural disasters, fires, theft, vandalism, and falling objects. It is relatively cheap, costing on average $13 a month or $160 a year. The cost varies depending on the value of the insured vehicle, with more expensive cars being more costly to insure.

The cost of comprehensive coverage is based on the "actual cash value" (ACV) of the vehicle, which is how much the car will cost to replace, minus the car's depreciation. The higher the value of the car, the higher the premium costs. However, if your vehicle is worth less than $4,000, it may not be necessary to carry comprehensive coverage.

Comprehensive coverage is typically inexpensive to add to your policy and provides a lot of protection. It is especially useful if you live in an area prone to natural disasters or if you have an expensive car that you couldn't afford to repair or replace on your own.

It's important to note that comprehensive coverage needs to be in place before any damage occurs, as insurers often don't allow you to add coverage right before or after a natural disaster. Additionally, filing a comprehensive claim may increase your auto insurance rates, so it's recommended to weigh the necessity of the coverage based on the value of your vehicle.

Filing a claim may increase your rates

Filing a claim after an earthquake will likely raise your auto insurance rates. On average, this claim will increase your insurance rates by $98 per year, or about $49 per six-month policy term. This increase will likely last for three years, as this is how long an insurance company will charge you after a claim. However, you might receive a bigger rate increase from a rate revision, which occurs when an insurance company reviews their losses from the previous year and raises or lowers their premiums to remain profitable.

The number of claims filed has a direct impact on your rates. The more claims you file, the more likely your rates are to increase. File too many claims, and your insurance company may not renew your policy. Additionally, your rates will almost certainly rise if the claim is based on damage you caused. If you aren't at fault, your rates may or may not increase, depending on the circumstances and your insurance company's policies.

When deciding whether to file a claim, it's important to consider the extent of the damage and your deductible. If the damage is minor and doesn't exceed your deductible, it may be more cost-effective to pay for the repairs yourself rather than risk an increase in your insurance rates. On the other hand, if the damage is substantial and exceeds your deductible, filing a claim may be the best option.

It's worth noting that comprehensive claims, such as those for earthquake damage, typically have a lesser impact on your insurance score and premiums than collision or liability claims. This is because they weren't a direct result of your driving. However, they could still increase your premiums because there is a higher chance of that damage happening again.

Earthquake damage is covered if it's included in your policy

Earthquake damage to your vehicle is covered by your auto insurance policy, but only if you have comprehensive coverage included in your policy. This is because comprehensive coverage fills the gaps left by collision coverage, protecting your vehicle from weather events and natural disasters. Earthquakes are included in the \"weather-related incidents\" bucket, so unless your policy has a unique stipulation, earthquake coverage should be consistent across all major car insurance companies, in every US state.

Comprehensive coverage is designed to pay for your vehicle if damage occurs outside of your control. This includes earthquakes and other weather-related events like hurricanes, tornadoes, and floods, as well as non-weather-related events like theft and vandalism. If you live in an area prone to earthquakes or other natural disasters, comprehensive coverage can give you peace of mind and protect you from high out-of-pocket costs for things outside your control.

It's important to note that comprehensive coverage is not a requirement to drive legally, and it is not included in the minimum auto insurance coverage. Therefore, if you want to ensure that your vehicle is covered in the event of an earthquake, be sure to add comprehensive coverage to your policy. Additionally, keep in mind that many insurers don't allow you to add coverage right before or after a natural disaster, so it's best to plan ahead.

The cost of comprehensive coverage depends on the value of the insured vehicle. The higher the value of the vehicle, the higher the premium costs. However, comprehensive coverage is typically inexpensive to add to your policy, with an average cost of around $13 a month. When deciding whether to add comprehensive coverage, consider the value of your vehicle and weigh the cost of coverage against the potential risk of damage.

In summary, earthquake damage to your vehicle is covered by your auto insurance policy if comprehensive coverage is included. Comprehensive coverage provides protection from a range of events outside your control, giving you peace of mind and financial protection in the event of an earthquake or other natural disaster.

Homeowners and renters insurance does not cover earthquake damage

If you're a homeowner or a renter, it's important to understand that your insurance policy does not typically cover earthquake damage. This exclusion is due to the potential for catastrophic claims losses, which can result in total losses for home and renters policies. Earthquakes are generally deemed too risky for standard coverage.

However, this doesn't mean you're entirely unprotected in the event of an earthquake. If you reside in an earthquake-prone area, you have the option to purchase an earthquake endorsement or a separate earthquake insurance policy. This additional coverage can provide financial protection in the event of earthquake-related damage to your home or rented property.

For instance, in California, the California Earthquake Authority (CEA) offers earthquake insurance policies. The CEA is a not-for-profit organisation that provides coverage for the structure of your house, building code upgrades, and emergency repairs. They also offer separate coverage options for your belongings and additional living expenses that may arise if your home becomes uninhabitable.

It's worth noting that earthquake insurance rates can vary significantly depending on the risk level of your location. Deductibles for earthquake insurance plans are typically higher than those in standard homeowners or renters insurance policies, usually ranging from 5% to 15% of the policy limit.

If you're unsure whether your current insurance policy includes earthquake coverage, carefully review your policy documents or contact your insurance provider for clarification. It's always better to be informed and prepared, especially when it comes to protecting your home and belongings from potential disasters.

Frequently asked questions