Earthquake deductibles (percent vs dollars)

• Percentage-based: Earthquake deductibles are commonly 5%, 10%, 15%, or 20%.
  This percentage is applied to a coverage limit, not the repair bill.
• Applies before payment: The deductible is subtracted from the covered loss before the insurer pays anything.
  If damage doesn’t exceed the deductible, no payment is made.
• Separate from standard deductibles: Your homeowners deductible does not apply to earthquake losses.
  Earthquake deductibles stand alone and are usually much higher.

Earthquake deductibles aren’t designed for small losses—they’re designed for catastrophe.

• Step 1: Identify the base: The deductible usually applies to Coverage A (Dwelling), not market value.
  Always confirm which coverage the percentage applies to—forms vary.
• Step 2: Multiply: Coverage A × deductible percentage = your out-of-pocket threshold.
• Example: A home with $600,000 Coverage A and a 15% earthquake deductible.
  $600,000 × 15% = $90,000 deductible.

If you can’t comfortably plan for the dollar number, the percentage is too high.

• High rebuild costs: In seismic zones, rebuild values are already elevated due to labor and materials.
  A percentage of a large number becomes a very large deductible.
• Widespread damage: Earthquakes affect entire regions at once, stressing insurers and repair infrastructure.
  Deductibles help carriers remain solvent during mass-loss events.
• Loss clustering: Multiple parts of the home can be damaged simultaneously—foundation, framing, utilities.
  Small cracks can still lead to six-figure repair scopes.

Earthquake coverage is built for survival and rebuilding—not convenience.

• Lower deductible = higher premium: A 5% deductible costs more annually but reduces post-loss strain.
  This is often preferable for homeowners without large liquid reserves.
• Higher deductible = self-funding risk: A 15%–20% deductible assumes access to significant cash, equity, or financing.
  Ask yourself where the money would come from after a regional disaster.
• Stress test the number: Plan for the deductible while also covering temporary housing and living disruptions.
  Earthquake losses often come with extended displacement.

A deductible you can’t fund is functionally uninsured risk.

• Confusing market value with Coverage A: The deductible is tied to insured value, not what the home would sell for.
• Assuming partial damage won’t exceed the deductible: Structural and foundation repairs escalate quickly.
• Ignoring contents and loss of use: Some policies apply separate deductibles or limits to other coverages.
  Always review how contents and additional living expense are handled.

Earthquake losses rarely match expectations—good planning accounts for that.

Is the deductible applied per claim or per event?
Typically per event. One earthquake equals one deductible, even if multiple areas of the home are damaged.

Can I choose a dollar deductible instead?
Most earthquake policies require percentage deductibles, though options vary by carrier and state.

Does insurance help if I can’t afford the deductible?
No. The deductible is the homeowner’s responsibility and must be paid before coverage responds.