Does my car insurance cover damage caused by an earthquake?

Earthquakes can cause worry wherever you live, even if the chances are remote. Damage to your property, including your vehicle, can add up to thousands of dollars, leaving you with a hefty bill. The good news is, if you have comprehensive car insurance, you’re covered in case of an earthquake.

Does car insurance cover damage caused by an earthquake? This article will explain whether car insurance covers damage caused by earthquakes, what type of insurance you need, and whether you should opt for insurance to pay for such damage.

Car Insurance for Damage Caused by Earthquakes

Standard car insurance requirements vary by state, but generally cover liabilities due to collisions and accidents, such as vehicle damages and medical bills.

However, you need comprehensive coverage to pay for damages to your car due to earthquakes or other natural disasters. You must add this optional coverage to your car insurance to cover damages to your vehicle other than those caused by collisions.

Comprehensive Coverage Pays for Damage Caused by Earthquakes

Comprehensive coverage protects you from paying for damages from causes such as theft, vandalism, animals, fire, or natural disasters such as hurricanes, floods, and, yes, earthquakes.

Read more: Does Car Insurance cover hurricane damage?

While comprehensive coverage is not mandatory, if your car is financed or leased, lenders may require full coverage (including comprehensive coverage) for your vehicle.

You can read more about the best comprehensive car insurance companies for more details. The higher the value of your vehicle, the more important it is to have comprehensive coverage.

The Cost of Comprehensive Coverage

As with most auto insurance, the comprehensive coverage rates depend on various factors, from your age and driving record to insurance regulations in your state. However, you can minimize your rates by taking a higher deductible. Your insurance company will pay less when you file a damage claim.

According to the National Association of Insurance Commissioners (NAIC), the average annual comprehensive rate was $97.26 in California in 2020, while it was $353.10 in South Dakota. The annual national average for comprehensive coverage in 2020 was $174.26.

Read more: What is the difference between a deductible and a premium in car insurance?

How much will my insurance pay if I file a claim for damage caused by an earthquake?

The insurance company’s payout primarily depends on the extent of damage to your car due to the earthquake, often based on repair estimates by car mechanics or workshops.

Generally, if your claim is approved, the insurance company will pay for any approved repairs minus your deductible, which is the portion for which you’re responsible.

Sometimes, the insurance company may say the car is “totaled.” This means that the cost to fix the car is higher than a certain percentage of the car’s actual cash value.

This actual cash value depends on various factors, such as wear and tear on the car before the damage, pre-existing problems, and depreciation. If the car is declared totaled, your payout will be the car’s value, as determined by the insurance company.

How to File a Claim for Damage Following an Earthquake

The best way to answer this question is to closely examine your car insurance. Your plan mentions a deductible, which is the amount you must pay before your insurance company pays for the damage to your car.

The deductible is generally in the range of $100 to $1,000, but it can vary. If the earthquake caused minor damage to your car, such as a few scratches or dents, you may be better off paying for repairs, as you may not exceed your deductible anyway.

However, if the damage is substantial, compare the cost of repairs to the deductible. For example, filing an insurance claim would make more sense if the repair average is $3,000, and your deductible is $1,000. If you file a claim for comprehensive coverage, ensure the claim amount is more than the deductible.

Is it worth paying extra for comprehensive coverage to cover damage caused by earthquakes?

Purchasing comprehensive coverage is a great way to ensure your insurance company pays for the damage caused by an earthquake or other weather-related incidents. However, if you need to determine whether the extra premium is worth it, here’s a simple calculation you can do to help you decide.

First, assess the value of your vehicle. The higher the value of your vehicle, the more important it is to have comprehensive coverage.

Next, consider the amount you need to pay for comprehensive coverage. Compare rates and car insurance deductible options from various auto insurance companies. Add this deductible amount to the comprehensive coverage premium for the year.

If this adds up to more than the value of your car, then you may be better off without comprehensive coverage.

However, if you have a highly dependent job on your car, you should opt for comprehensive coverage. This ensures that your insurance payout can cover the cost of damages, even if your car is totaled. Your lender may also require you to purchase comprehensive coverage for as long as you have a loan on the car.

Case Studies: Car Insurance Coverage for Earthquake Damage

Case Study 1: Sarah’s Comprehensive Coverage

Sarah lived in an earthquake-prone region and experienced significant damage to her car during a powerful earthquake. Fortunately, Sarah had comprehensive car insurance that covered earthquake damage. She immediately filed a claim with her insurance company, providing the necessary documentation and photographs of the damage.

The insurance company assessed the claim and approved it, allowing Sarah to get her car repaired without bearing a substantial financial burden.

Case Study 2: Michael’s Uncovered Damage

Michael also lived in an area susceptible to earthquakes. Unfortunately, he did not have comprehensive car insurance and his vehicle sustained severe damage during an earthquake. When he filed a claim with his insurance company, he learned that his policy only covered collision-related damages and did not include coverage for earthquakes.

As a result, Michael had to pay for the repairs out of his own pocket, highlighting the importance of having comprehensive coverage.

Case Study 3: Emily’s Total Loss

Emily’s car was parked outside during a powerful earthquake, and it was completely destroyed when a building collapsed onto it. Fortunately, Emily had comprehensive car insurance that covered earthquake damage. She promptly filed a claim and provided all the necessary documentation to her insurance company.

The insurance adjuster assessed the damage and determined that the repair costs exceeded the car’s actual cash value. Consequently, the insurance company declared the vehicle a total loss and provided Emily with a settlement based on the car’s value. With the insurance payout, Emily was able to purchase a new car.

Car Insurance for Damages Caused by Earthquakes: The Bottom Line

Car insurance can cover damage to your car caused by an earthquake if you have opted for comprehensive coverage.

Choose an insurance plan considering the insurance premiums, the value of your car, and your situation. If earthquakes or other natural disasters are common in your area, this coverage may well be worth having.