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Earthquake Insurance

Source: Brad Johnson

Since 2005, earthquakes powerful enough to be felt by people have occurred in 40 of the 50 states, according to the United States Geological Survey. Not surprisingly, Alaska, California, and Hawaii lead the nation in frequency and size of earthquakes, but other states have significant numbers of quakes as well. For example, New York had 25 perceptible earthquakes from 2005 to 2007. Maine had 12, and Tennessee had 10. From Florida (2) to Washington (18), America is earthquake country.

According to the Federal Emergency Management Agency (FEMA), earthquakes are responsible for $4.4 billion worth of property losses each year, fourth among leading causes behind fires ($8.6 billion in losses), hurricanes ($5.4 billion in losses), and floods ($5.2 billion in losses). Insuring against earthquake losses is tricky. Here are five things you should know:

1. Standard homeowner insurance does not cover structural damage caused by an earthquake's shaking. The violent shaking of an earthquake can seriously damage any building, including a home. Structures made of brick and stone, such as walls, fireplaces, and chimneys do not have the flexibility to bend very far without cracking or even collapsing. That same goes for tile work. As a result, floors, bathroom walls, and kitchen backsplashes are especially vulnerable to shaking damage. Many homes, particularly in the western United States, are built on concrete slabs that can crack as the ground moves in waves beneath them. Concrete foundations also can develop fissures, compromising their integrity. If the damage is severe enough, the home could be condemned and, in severe cases, torn down. Structural damage caused by an earthquake is not covered by a standard homeowners insurance policy.