The Definition of Earthquake Insurance

In the United States Earthquake Insurance is a form of Property Insurance that covers the policyowner from damage caused by earthquakes, including shaking, subject to the limits, deductibles, and exclusions found in the policy. It is important to note that all policies are different and numerous exclusions will apply. Differences may exist between Personal and Commercial Earthquake Policy Forms. Earthquake policies often are available in standard or comprehensive forms. Coverage may be offered for the Main Structure, Other Structures, Personal Property, and Loss of Use, among others. Loss of Use could potentially include Loss of Rents.

What is the Definition of Earthquake Insurance?

Believe it or not there is no simple definition. It is a far more complicated definition than other forms of insurance.

Business Dictionary defines Earthquake Insurance as: “Insurance that covers loss of property or damage due to an earthquake.“

US Legal defines it as: “property insurance which provides insurance against damage caused to a property by earthquake.“

Wikipedia goes a bit farther with their definition “Earthquake insurance is a form of property insurance that pays the policyholder in the event of an  earthquake that causes damage to the property. Most ordinary homeowners insurance policies do not cover earthquake damage. “

In answering the question what is Earthquake Insurance, the California Earthquake Authority states, in part: “Earthquake insurance coverage guards against financially devastating shaking events.” However that itself is not a definition.

The Issues with Simple Earthquake Insurance Definitions:

The major issues with many of these definitions is the following:

• They too broadly explain what it covers.
• They fail to mention that differences will exist between insurer definitions.
• They shed no light on the fact that almost all insurance is Subject to financial limits.
• None of them seem to mention the Deductibles which are frequently listed as a percentage of the Coverage A.
• There is no mention of Exclusions.

The Quakecov definition attempt to shed light on these discrepancies. In addition it seems that the definition of an Earthquake is equally important as it relates to the insurance for it. The Britannica definition of an Earthquake: “any sudden shaking of the ground caused by the passage of  seismic waves through Earth’s rocks” hardly suffices for an earthquake insurance policy definition.

The CEA sample policy BEQ-3B (02-2019 Edition) defines an earthquake as thus: “Earthquake” means a vibration-generating rupture event caused by displacement within the earth’s crust through release of strain associated with tectonic processes and includes effects such as ground shaking, liquefaction, and damaging amplification of ground motion. While land sliding, including seismically-induced land sliding, is not itself an earthquake, we cover, subject to “LOSSES EXCLUDED” Item 5 and subject to all other terms and conditions of this policy, loss to covered property arising out of a seismically-induced landslide if that landslide is induced by, and would not have occurred in the absence of, an earthquake that commences during the policy period as part of a seismic event that commences during the policy period. Earthquake does not mean or include tsunami or volcanic eruption.”

Other Earthquake Insurer Definitions:

The Geovera Comprehensive Policy (MEQ1 09-07) defines an “Occurrence” as “means all loss to covered property due to earthquake shocks that occur within a continuous 72 hour period. This includes land shock waves or tremors before, during or after a volcanic eruption.” But even this simple definition of an occurrence of a earthquake is not complete because there are numerous exclusions to “all loss.” One of these exclusions (there are many) listed on that same policy is: “Other Earth Movement; meaning volcanic eruption, landslide, mine subsistence, mudflow, sinkhole, or earth sinking, risking or shifting.” [Redundant note this is not a complete list of exclusions.]

The reality is that the definition of Earthquake Insurance only matters in one place: Your Earthquake Insurance Policy. Since earthquakes are flat out NOT covered under homeowners insurance, how it is defined in your EQ policy is of paramount importance. This is why we always encourage consumers to READ their policies. Unlike many home insurance policies that can run up to 100 pages of terms and coverages. This same Geovera policy is a relatively simple 16 pages long.

The QuakeCov.com Earthquake Insurance Definition:

Earthquake Insurance: In the United States Earthquake Insurance is a form of Property Insurance that covers the policyowner from damage caused by earthquakes, including shaking, subject to the limits, deductibles, and exclusions found in the policy. It is important to note that all policies are different and numerous exclusions will apply. Differences may exist between Personal and Commercial Earthquake Policy Forms. Earthquake policies often are available in standard or comprehensive forms. Coverage may be offered for the Main Structure, Other Structures, Personal Property, and Loss of Use, among others. Loss of Use could potentially include Loss of Rents.

Please be sure to read your own Earthquake insurance policy.

Thanks for Reading one of our ‘Definitional’ Articles. Should you have any questions, please feel free to contact us at any time. Please note that reading any article on the internet is no replacement for speaking with a licensed insurance agent in your jurisdiction.

Please note that ultimately the definition of an earthquake and earthquake insurance matters most to the insurer contract that you have. If your insurer defines an earthquake or the insurance differently than that is most important.