Is earthquake insurance worth it in Utah?
Depending on the risk-level of your area, having earthquake insurance can save you big financially in the long run. It's always worth getting a quote.
Earthquakes can cause extreme amounts of damage. But did you know standard homeowners insurance policies don’t cover that damage?
It’s true. Earthquakes are one of several exclusions to a standard homeowners insurance policy. Most of Utah’s population lives on a major earthquake fault line—the Wasatch Fault Line. With the increased earthquake risk, Utah earthquake insurance should be at the top of your mind.
If you’re not sure it’s right for you, this guide will help you understand what it covers and the costs involved. And if you’re here for homeowners insurance, we can help with that, too. Use the free home insurance comparison tool from Insurify to search and compare the best coverage.
Do You Need Utah Earthquake Insurance?
As you can probably tell by its name, earthquake insurance protects your home and belongings from damage and destruction caused by an earthquake. It’s a vital consideration because standard homeowners and renters policies do not cover quake damage.
The Utah Insurance Department recommends that everyone have earthquake insurance. According to the Insurance Information Institute, Utah is one of the states at higher risk of quakes. Yet only about 14 percent of homeowners have earthquake insurance.
A policy can protect you against catastrophic financial loss if an earthquake damages or destroys your home.
What Earthquake Insurance Covers
Earthquake insurance has exclusions, limitations, deductibles, and waiting periods similar to what you find with other types of insurance.
Generally, a policy will cover:
Some policies can include an upgraded replacement, repair of driveways and walkways, and emergency repairs for aftershock protection.
However, earthquake insurance doesn’t cover all damage relating to a quake. Exclusions can include:
Land, sinkholes, cracks, or holes in your yard
External water damage from sewer backup or flood
Your homeowners insurance typically covers fire damage, even if the fire is a result of an earthquake. For vehicle damage, ask your Utah auto insurance provider if quakes are covered.
A policy limit is the maximum amount an insurance company will pay for covered losses. Your dwelling limit for earthquake insurance is usually the same as your Utah homeowners insurance policy.
If you’re not sure what your limit is or if the amount hasn’t been updated in a while, you may not have enough. Check with your insurance company to review the amount of coverage and make sure it’s enough to replace your home.
In most cases, each coverage type has a separate policy limit:
Other structures: 10%
Personal property: 50%
Loss of use: 20%
For instance, if your home is insured for $200,000, your policy limits would be:
$20,000 for other structures
$100,000 for personal property
$40,000 for loss of use
A deductible is an amount you’re responsible for on each claim. Earthquake insurance has a high deductible compared to a typical homeowners policy. Deductibles generally range from 10 to 20 percent of the coverage limit.
Like policy limits, deductibles can vary by coverage type. You may have a separate deductible for your dwelling, personal property, and other outdoor structures.
You don’t typically pay your earthquake deductible up front. Instead, the insurance company usually deducts the amount from your claim check.
Most earthquake insurance policies in Utah require a waiting period. Your coverage might not go into effect until 10 to 30 days after you purchase a policy. It’s a standard part of most types of catastrophic insurance.
Many insurers stop accepting applications for new earthquake insurance following a large earthquake. You can’t buy coverage for damage that has already occurred or is occurring. A moratorium helps separate one earthquake event from another.
The Cost of Utah Earthquake Insurance
How much is Utah earthquake insurance? Policies aren’t as expensive as you might think. According to the Utah Insurance Department, policies can range from $500 to $1,000 per year.
Your cost can vary from one insurance company to the next. It also depends on:
Higher deductibles generally mean lower premiums. Read the fine print, and ask questions when shopping around for Utah earthquake insurance. Not all policies cover the same types of damage, and the cost can reflect that. Opting for the cheapest policy could leave you without the coverage you need
How to Get Earthquake Insurance in Utah
Getting Utah earthquake insurance is straightforward. Although many insurers don’t advertise coverage, most provide earthquake insurance. According to the Utah Insurance Department’s 2019 report, the top five earthquake insurance providers are:
State Farm Fire and Casualty Company
Farmers Insurance Exchange
United Service Automobile Association
Zurich American Insurance Company
You can start by contacting your homeowners insurance company. They may offer earthquake insurance as an add-on to your existing policy. Shopping around can help lower your costs because the price can vary from one insurer to the next.
Deciding on Utah Earthquake Insurance
From Provo to Salt Lake City, Utah is one of the top states in the U.S. at risk for an earthquake. If you don’t have earthquake insurance, consider purchasing a policy. Reach out to your homeowners insurance agent to ask about coverage. You may be able to add earthquake coverage to your existing policy.
Make sure you understand what your policy covers before an earthquake strikes. Earthquake insurance tends to have higher deductible amounts and limits on how much coverage is available. However, policies are generally less expensive than in years past. It may be cheaper than you think.