If you're on the East Coast, earthquake insurance probably isn't at the top of your list. But Tuesday's earthquake centered in Virginia caught millions of Americans off guard. How many East Coast earthquake insurance policies do you think were in effect at the time?
The East Coast is generally not afflicted by earthquakes. Hurricanes and blizzards are more their cup of tea. But, the 5.9-magnitude quake was felt in the Carolinas, Virginia and several other Eastern states, including New York.
Many homeowners may be curious as to whether earthquake damages are included in your home insurance policy.
Don't bet on it.
In New York, where tremors were felt, earthquake insurance is specifically excluded from standard homeowners' policies. This is usually true even in states more commonly hit by earthquakes.
In California, homeowners aren't necessarily mandated to have earthquake insurance. However, residential property insurance providers are required under law to offer earthquake coverage to interested homeowners.
So, homeowners who want their property to be covered must purchase separate earthquake insurance.
But most homeowners don't buy earthquake insurance policies. In 2007 New Yorkers only spent $15 million out of around $3.9 billion in insurance premiums for earthquake insurance, according to the New York State Insurance Department.
The cost-benefit analysis is quite common among homeowners. Many likely concluded that earthquake insurance on the East Coast was frivolous. After all, there is little history of big quakes hitting states like Virginia.
But, this recent earthquake helps reminds us that natural disasters can strike most anywhere. It may mean a rise in the sales of East Coast earthquake insurance policies. And maybe even California earthquake insurance policies, too.
- Virginia is 'not an unexpected location' for a quake (Boston Globe)
- Consumers: Earthquake Insurance (California Department of Insurance)
- Earthquakes (The Northeast States Emergency Consortium)
- Renter's Insurance In a Nutshell: What You Need to Know (FindLaw's Law and Daily Life)