Earthquake Insurance
A specialized form of property insurance that covers damage to buildings and personal property caused by earthquakes. Most standard homeowners insurance policies exclude earthquake damage, making this separate coverage essential in seismically active areas.
Example
“After the major earthquake damaged her foundation and cracked the walls, Maria was grateful she had purchased earthquake insurance separate from her standard homeowners policy.”
Memory Tip
Remember 'SHAKE = Separate Help After Killer Earthquakes' - earthquake coverage is separate from regular home insurance.
Why It Matters
Earthquake damage can cost tens of thousands to rebuild, and without this coverage, homeowners must pay out-of-pocket since standard policies exclude seismic damage. Even minor earthquakes can cause significant structural damage that requires expensive repairs.
Common Misconception
Many homeowners assume their regular homeowners insurance covers earthquake damage, but it typically doesn't. Others think earthquake insurance is only necessary in California, but seismic risk exists in many other states including Missouri, South Carolina, and Alaska.
In Practice
John owns a $400,000 home in California and purchases earthquake insurance with a 15% deductible ($60,000). After a 6.5 magnitude earthquake causes $120,000 in damage, John pays the first $60,000 out-of-pocket as his deductible. The insurance company covers the remaining $60,000 in repairs. Without earthquake insurance, John would have been responsible for the entire $120,000 repair bill.
Etymology
Combines "earthquake" from Old English "eorthe" (earth) and "cwacian" (to shake) with "insurance" from Latin "securus" meaning secure or safe.
Common Misspellings
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Related Terms
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