NC Earthquake Insurance – Is It Covered By Homeowner’s Insurance

Today much of North Carolina was greeted by, literally, an earth rattling event.  That’s right!  North Carolina experienced shocks from the Earthquake in Virginia.  Granted, our country men and women on the Left Coast giggle and snicker at how we react to such an event, the truth is most Tarheels don’t remember the last “quake”.

Much like the quake around 2003 or 2004, this event got this Insurance Guy thinking.  If I were to take a poll around 10 AM this morning about insurance coverage for earthquakes, my guess is that 80{66506b27ca8f5234034d808fc0aabc14bc16ceb45d71027974b073b60f711cfe} – 90{66506b27ca8f5234034d808fc0aabc14bc16ceb45d71027974b073b60f711cfe} of those polled would assume that they have coverage under their Homeowner’s Policy.  However, once the quake hit and people let the hysteria take over, questions surely came about whether or not that would be true.

The fact is, damage caused by Earthquake is not a standard coverage under North Carolina’s Homeowner’s Forms.  The common NC Homeowner’s Form (HO-3 & HE-7) is what the insurance industry calls a “Special Form Policy”.  Basically, that means that things (the industry calls “perils”) are covered under the policy unless SPECIFICALLY EXCLUDED.  If you were to whip out your homeowner’s policy right now (if you can actually find it), you will see numerous exclusions, and yes, you would find the Earthquake Exclusion.

The last time Greensboro, NC felt the effects of an earthquake I can remember feverioushly drafting a letter to all of my clients  letting them know that they didn’t have coverage for damage caused by an Earthquake.  After getting that letter out, I received a number of phone calls inquiring about this fact.  After those many calls, one client decided add Earthquake coverage to their Homeowner’s Policy.

Times have changed!  Today, I don’t need to draft a letter like that again.  I can simply put the word, much like I am doing right now.

What hasn’t changed during that time is the fact that YOU DO NOT HAVE EARTHQUAKE COVERAGE!  The other thing that hasn’t changed is that you can add this endorsement to your homeowner’s policy.  The price of the endorsement varies depending on the amount of coverage you have on your dwelling as well as the construction type (Frame or Brick).

I suggest contacting your agent as soon as possible to inquire about this coverage.  Remember, NC sits on a major Fault Line.  By now, you have probably even heard that the East Coast actually has the propensity to have farther reaching effects of an Earthquake as our “rocks” are millions of years older than the “rocks” of our brothers & sisters on the Left Coast.

Whether you purchase the Earthquake Endorsement or not, you would be well served to at least take a moment to learn a little more.