Homewoners Insurance

Earthquake

Is earthquake coverage really necessary in Kentucky? This is a question we are asked almost daily and we wish we had an answer. The New Madrid fault extends about 120 miles from near Cairo, Illinois across Western Kentucky and through New Madrid, Missouri. A large earthquake could also affect Indiana, Arkansas and Tennessee and possibly other states. Because of the possible high severity, and because of the low cost of earthquake coverage, we usually recommend purchasing the coverage.

The New Madrid fault was responsible for an earthquake in 1812 and it was estimated at more than 8.5 on the Richter scale. We have had small tremors locally in the past ten years. If there were to be a severe earthquake along the New Madrid fault we could have moderate to major damage locally.

The Homeowners policy excludes earthquake coverage but it can be added by a special endorsement. The earthquake coverage has a special deductible that can vary by company but it is usually 5% to 10%. If your policy is written with a specific limit on the dwelling, other structures, contents and loss of use, the deductible would apply to each coverage separately. If you have a blanket limit of coverage for the dwelling, other structures, contents and loss of use, the percentage deductible is usually based on the blanket limit.

The cost of earthquake coverage varies based on the construction of your home - frame construction being less expensive than brick or brick veneer. The cost can also vary depending on the county in which you live. Premiums in Jefferson County, Kentucky will average $3.00 to $4.00 per $10,000 of coverage on a wood frame home and $6.00 to $7.00 per $10,000 of coverage on a brick veneer home.

The auto policy does not have an earthquake exclusion. If you have comprehensive or other than collision coverage, your policy would pay for damage to your vehicles subject to your deductible.