EARTHQUAKE INSURANCE IN USA

Standard homeowners, renters and business insurance policies do not cover damage from earthquakes.

Coverage is available either in the form of an endorsement or as a separate policy. Earthquake insurance provides protection from the shaking and cracking that can destroy buildings and personal possessions. Coverage for other kinds of damage that may result from earthquakes, such as fire and water damage due to burst gas and water pipes, is provided by standard home and business insurance policies. Earthquake coverage is available mostly from private insurance companies. In California, homeowners can also get coverage from the California Earthquake Authority (CEA), a privately funded, publicly managed organization. Only about 12 percent of California residents currently have earthquake coverage, down from about 30 percent in 1996, two years after the Northridge, California, earthquake.

Seven percent of American homeowners responding to a 2014 poll by the Insurance Information Institute said they have earthquake insurance, either as an endorsement to their homeowners policy or as a separate policy, down from 10 percent in 2013 and 13 percent in 2012. Homeowners in the West were most likely to buy earthquake coverage,10 percent; followed by the Midwest, 7 percent; the South, 6 percent; and the Northeast, 2 percent. The survey also found that 11 percent of people earning $100,000 or more a year said they have earthquake insurance, a slightly higher percentage than any other income group.

EARTHQUAKE INSURANCE, DIRECT PREMIUMS WRITTEN BY STATE, 2013 (1) ($000) Rank State Direct premiums written ($000) 1 California $1,636,448 2 Washington 157,949 3 Missouri 90,310 4 Tennessee 77,636 5 Illinois 63,616 6 Oregon 63,239 7 New York 44,211 8 Kentucky 41,366 9 Utah 38,977 10 South Carolina 36,702 11 Indiana 36,269 12 Texas 33,743 13 Florida 29,244 14 Ohio 28,777 15 Vermont 28,337 16 Arkansas 28,330 17 Alaska 24,973 18 Nevada 19,898 19 Massachusetts 19,809 20 Mississippi 18,174 21 Virginia 17,147 22 New Jersey 16,687 23 Georgia 15,964 24 Pennsylvania 14,892 25 Oklahoma 13,107 26 North Carolina 12,261 27 Maryland 11,728 28 Hawaii 11,602 29 Alabama 10,593 30 Arizona 10,150 31 Colorado 9,448 32 Louisiana 8,398 33 Kansas 7,602 34 Michigan 7,390 35 Connecticut 6,720 36 Minnesota 5,972 37 Wisconsin 5,546 38 Iowa 5,076 39 Montana 3,993 40 Idaho 3,441 41 Wyoming 2,944 42 Nebraska 2,670 43 New Hampshire 2,563 44 D.C. 2,513 45 New Mexico 2,376 46 Rhode Island 2,215 47 Maine 1,879 48 West Virginia 1,688 49 North Dakota 1,176 50 Delaware 1,110 51 South Dakota 662 United States $2,706,844 (1) Includes the California Earthquake Authority, a state fund. Source: SNL Financial LC. View Archived Tables

Earthquake insurance rose from $2.1 billion in 2012 to $2.7 billion in 2013. California had the largest amount of earthquake premiums in 2013, at $1.6 billion, accounting for 61 percent of U.S. earthquake insurance premiums written. This figure includes the state-run California Earthquake Authority, the largest provider of earthquake insurance in California. The next highest ranking states were Washington state (6 percent of premiums) Missouri (3 percent), Tennessee (3 percent