I am not much of a fan of "could it happen here" stories, but the earthquake in Haiti does remind us that much of the United States, in fact much of the world, lives along fault zones. In the last 110 years, quakes have shaken the ground in 39 states. Ninety percent of Americans live in potential quake zones.

Geologists now believe that major quakes anywhere could weaken faults worldwide.

So, should you buy earthquake insurance? There is usually a surge of interest after big quakes.

Here is what you need to know:

  • Homeowners insurance typically does not cover earthquake damage. It is sort of like flood damage; if you want coverage, you need special insurance.
  • Depending on where you live, quake insurance is fairly inexpensive. Wood homes, which tend to absorb shock more than brick or stucco, might be less costly to insure against quakes. You often can get discounts if you strap down your water heater, meet new building codes for quake safety and agree to a high deductible. One-story homes are less costly to insure than multiple-story housing.
  • United Policyholders says, "Could you afford to pay out of pocket for repairs/rebuilding? What would you do if you couldn't? Quake damage often requires engineering fixes which can be very expensive -– typically $50k and up. Can you afford a policy with a 10 percent instead of a 15 percent deductible and if so -– how much would the damage have to be before coverage would kick in?"

  • Insure.com says, "Even in California, where earthquake fears are a daily fact of life, only about 12 percent of homeowners have earthquake insurance, according to the California Earthquake Authority (CEA), down from 30 percent in 1996 when the state legislature created the CEA. Each year, more homeowners get rid of earthquake coverage than buy it because, according to consumer groups, they believe the policies cost too much and cover too little."


California has its own strategic plan for earthquakes.

United Policyholders, a nonprofit group that does public education on insurance issues (and is funded by grants and foundations, and is largely run by volunteers) provides the following links: