Why is Earthquake insurance important?

Earthquake insurance is crucial because standard homeowners and commercial property policies typically exclude damage caused by earthquakes. Earthquakes can strike without warning and cause catastrophic damage to buildings, foundations, inventory, and equipment. In many regions—especially near fault lines—just one event can result in hundreds of thousands of dollars in losses or complete structural collapse. Homeowners may be forced to relocate and rebuild, while businesses can face long-term closures, lost income, and unrecoverable assets. Without earthquake coverage, these costs fall entirely on the property owner. Even in areas with moderate risk, the financial impact of a quake can be devastating. Earthquake insurance provides critical protection and peace of mind for those wanting to safeguard their property and financial future from this unpredictable hazard.​

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Claims Example:

In August 2011, a magnitude‑5.8 earthquake struck the East Coast—shaking high-rise buildings across Maryland. In one large condominium tower, the tremors caused multiple sprinkler lines to rupture, flooding lower-level units even though there was no structural or façade damage. The resulting water damage, including ruined ceilings, flooring, and mechanical systems, totaled over $800,000. Fortunately, the association had purchased earthquake insurance with a sprinkler leakage endorsement, which covered the full cost. Without that coverage, the master policy would have excluded it as a flood event, leaving owners and the association on the hook.