Do you remember the minor earthquake that rattled Central Indiana a couple of weeks ago? Probably not until we just brought it to your attention again. The epicenter of the 3.8 magnitude quake was located about 50 miles southwest of Lafayette. It didn’t cause any damage or injuries, but it was strong enough to be felt by many and sparked quite the buzz for a few hours.
Although this latest quake is just a faint memory, do you know if your home and assets are protected if a major earthquake were to occur?
“Earthquake coverage is not part of a standard homeowner’s insurance policy, but can be added by endorsement,” said Kurt Watt, owner/agent at Reliable Insurance Solutions in West Lafayette. “If an earthquake endorsement is added to a standard homeowner’s policy, it would cover damage to home/contents caused by an earthquake, subject to the deductible.”
So, how much could a deductible run you?
“Earthquake deductibles are a percentage of the dwelling value, usually 5% or 10%,” Watt said. “So, if your home is insured for $400,000, the deductible would be either $20,000 (5%) or $40,000 (10%).”
Watt said there are certain situations where damage caused by an earthquake may be covered under a standard homeowner’s policy.
“If a homeowner doesn’t have earthquake coverage, but an earthquake causes a gas line break and ensuing fire damage, most likely the fire damage would be covered by standard homeowner’s policy,” said Watt. “Keep in mind not all policies are the same, so folks should read their policies and/or talk with their agent.”
Although rare, earthquakes do impact Central Indiana according to the National Weather Service. Greater Lafayette sits just hundreds of miles away from the New Madrid Fault Seismic Zone, centered near the tripoint of Missouri, Kentucky, and Tennessee. This fault zone threatens several states with minor to major seismic activity, including Indiana. In fact, between 1811 and 1812, this fault zone was responsible for causing a series of major earthquakes in the region resulting in towns being leveled and widespread damage to property.
When asked if he would advise homeowners to add an earthquake endorsement to their policy, Watt said he leaves it up to the homeowner.
“Probably 85% of our clients don’t carry earthquake coverage. The fault lines are in southwest Indiana, southeast Illinois, and western Kentucky,” Watt said. “Coverage for earthquakes is very inexpensive, which tells folks the risk is low (otherwise insurance companies would charge larger amounts of premium).”
Watt also encourages homeowners to keep in mind that with such a large deductible it would take a very substantial earthquake to cause damage that exceeds the deductible. While Reliable Insurance Solutions does offer earthquake coverage, most clients choose not to carry it.
“Generally, I encourage people to review their policies with us (or their agent) every year to make sure the consumer knows what coverage they have, what coverage they don’t have, and what coverage is available to them,” said Watt. “Nobody likes a surprise, so it’s best to have these conversations before a claim happens.”