Earthquake insurance commonly uses a percentage-of-value deductible rather than a flat dollar amount, meaning the out-of-pocket cost before coverage kicks in can be very large.
How it works
Home value times the deductible percentage gives the dollar deductible that must be paid out of pocket before the policy pays anything on a claim. The annual premium times years held gives total premiums paid over the holding period.
What this does not include
This doesn’t estimate actual earthquake damage probability or expected loss — those depend heavily on regional seismic risk and specific building characteristics, factors this calculator’s deductible-and-premium math doesn’t model.
How to use this calculator
- Enter home value, deductible percentage, annual premium, and years the policy is held.
Frequently asked questions
Why does earthquake insurance use a percentage deductible?
Earthquake damage can be catastrophic and correlated (many claims at once after a major quake) — insurers use a percentage deductible to limit exposure to smaller, more frequent claims while still covering major losses.
Is earthquake insurance included in standard homeowners insurance?
No — it’s typically a separate policy or endorsement, since standard homeowners policies generally exclude earthquake damage.
Why is the deductible often so much larger than a typical homeowners deductible?
Because it’s calculated as a percentage of home value (often 10%-25%) rather than a flat dollar amount — on an expensive home, that percentage can translate into a very large dollar figure.
