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Car insurance covers damages caused by earthquakes — as long as the vehicle carries comprehensive coverage. Comprehensive coverage fills the gaps left by collision coverage, protecting your vehicle from weather events and natural disasters. What exactly it covers, how much it costs, and whether or not it’s required are topics covered in the following analysis of car insurance after an earthquake.
Earthquake damage coverage is included in the "weather-related incidents" bucket. Unless your policy has a unique stipulation, this coverage should be consistent across all major car insurance companies, in every US state. If you move from Texas to California, where earthquakes occur more often, you would maintain earthquake coverage from your comprehensive insurance.
If a natural disaster is imminent, insurance companies may put a binding restriction on new and existing policies. In order to cut down on claims payouts, insurers restrict new lines of business or modifications to existing policies during these periods. This will keep you from adding comprehensive coverage in the days or hours immediately preceding a natural disaster. This is more often the case for wildfires, hurricanes, and floods, it can apply to any natural disaster, at an insurer's discretion.
The cost of comprehensive coverage depends on the value of the insured vehicle. Unlike liability coverage (bodily injury and property damage), an insurance company is forced to pay for damages to the covered vehicle in the case of a claim. If it costs more for an insurance company to replace a vehicle, they will bump up premium costs.
To shed some light on comprehensive coverage rates, we created a generic profile for a 2012 Honda Accord with comprehensive and collision, evaluating some top insurance companies.
|Insurer||Average Annual Premium|
USAA and GEICO offer the cheapest comprehensive coverage. We explored further by assessing insurance premiums by company at various coverage levels.
|Coverage Level||Average Annual Premium|
Considering these coverages will double your premium, it's worth weighing their necessity, based on the value of your vehicle.
Given the price of comprehensive coverage, it’s important to determine if you really need this coverage. As a general rule of thumb, if your vehicle is worth less than $4,000, you need not carry collision and comprehensive coverage. Use multiple sources to determine the value of your vehicle. Kelley Blue Book and NADA online are good places to start.
If you need to keep coverage on your vehicle but are worried about premium costs, consider changing your deductible(s). By raising your deductibles, you lower your premium — the two figures are inversely related.
It would be nice if either renters or homeowners insurance policies extended to cover cars during an earthquake. Unfortunately, renters and homeowners policies do not cover vehicles against earthquake damage.
Earthquakes are excluded from homeowners and renters insurance policies because of how catastrophic the claims losses can be. Much like floods, earthquakes tend to result in total losses for home and renters policies, and are deemed too risky for a standard policy. However, if you’re in an earthquake-prone area, you can purchase an earthquake endorsement or separate earthquake insurance policy entirely.
In California, for example, most earthquake policies are backed by the California Earthquake Authority. While this is separate from a homeowners or renters policy, they can be linked.
Although it won’t be as significant as a collision or liability claim, filing a claim after an earthquake will raise your rates. On average, this claim will raise your auto insurance rates by $98 per year — or about $49 per six-month policy term.
|Years After Accident||Average Annual Premium|
|1 Year Later||$1,525|
|2 Years Later||$1,623|
|3 Years Later||$1,721|
We’ve added this $98 estimate over a three-year period because that is how long an insurance company will charge you after a claim. However, you might receive a bigger rate increase from a rate revision. A rate revision occurs when an insurance company reviews their losses from the previous year to determine if they need to raise or lower their premiums in the future to remain profitable. If a year has included particularly large claims payouts — which can happen after natural disasters — insurers will raise rates to make up for their losses.
While rate revisions are common among major insurance companies, the amount each insurer charges may vary. If your rate jumps considerably after an accident or weather event, take the opportunity to shop around for a new, more affordable, policy. Enter your zip code below to see how much you could be saving.
You should be covered from damage caused by earthquakes through comprehensive coverage. Unless your car insurance policy has an earthquake-specific exclusion, you should have coverage.
If you’re looking for additional information regarding coverage against natural disasters, see our additional articles below:
Between September and December 2017, The Zebra conducted comprehensive auto insurance pricing analysis using its proprietary quote engine, comprising data from insurance rating platforms and public rate filings. The Zebra examined nearly 53 million rates to identify trends related to auto insurance rating factors across United States zip codes — averaged by state — and Washington, DC.
This analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2013 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision. For coverage level data, optional coverage (that must be rejected in writing) is included where applicable, including uninsured motorist coverage and personal injury protection.
National property and casualty loss information is from the Insurance Information Institute and the NOAA National Centers for Environmental Information U.S. Billion-Dollar Weather and Climate Disasters report.
For vehicle make and model data, analysis referenced the most popular vehicles in the U.S. by 2016 year-end sales according to Goodcarbadcar.net’s automakers’ data.
Rate data may vary slightly throughout report based on rounding.