Is the title of this article surprising or upsetting to you? If so, you're not alone. Studies show that 35% of people surveyed (by the National Association of Insurance Commissioners) thought earthquake damage was covered by their homeowners insurance policy. Don't be fooled. Here is an example of what one California insurance company sends out along with the policy for homeowners insurance and an offer of very basic earthquake coverage.

Earthquake Insurance Offer

  Your policy does not provide coverage against the peril of earthquake.

  California law requires that earthquake coverage be offered to you at your option.

  WARNING: These coverages may differ substantially from and provide less protection than the coverage provided by your homeowners policy. There are exclusions and limitations such as outbuildings, swimming pools, masonry fences and masonry chimneys. This disclosure form contains only a general description of coverages and is not part of your earthquake insurance policy. Only the specific provisions of your policy will determine whether a particular loss is covered and, if so, the amount payable.

  The coverage, subject to the policy provisions, may be purchased at additional cost on the following terms:

  1. Amount of dwelling coverage: ________________ (based on the insured value of your home as reported in Coverage A of your homeowners policy.)
  2. Applicable Deductible: 15% of the amount of the dwelling applies. If your loss is below this amount, you may not receive any payment from your coverage. Your insurance company or agent will provide written notice as to how the deductible applies to the market value of your coverage, the insured value of your coverage, or the replacement value of your coverage.
  3. Contents coverage: _____________ (usually no more than $5,000 basically) If your loss does not exceed the deductible for the dwelling, you will not receive any payments for this coverage. Your insurance company or agent will provide written notice as to how the deductible applies to the amount you receive pursuant to this coverage.
  4. Additional living expenses: $1,500
  5. Rate or Premium: __________

You must ask the company to add earthquake coverage within 30 days from the date of mailing this notice or it shall be conclusively presumed that you have not accepted this offer. This coverage shall be effective on the day your acceptance of this offer is received by us.

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All coverage is restricted to the language contained within the actual insurance policy.