Nashville, TN – As thousands of Tennesseans take part in the ninth annual Great Central U.S. ShakeOut on Thursday, October, 17th, 2019, the Tennessee Department of Commerce and Insurance (TDCI) reminds consumers that earthquake insurance can lower consumers’ financial burden in the event of a devastating earthquake.
Earthquakes frequently occur in Tennessee because the state’s eastern and western areas sit along seismic zones (the East Tennessee Seismic Zone and the New Madrid Seismic Zone respectively) where earthquake activity happens more frequently.
In 2018, the United States Geological Survey reported 301 earthquakes occurred in Tennessee.
While most quakes that occur in Tennessee are small, scientists have said there is a 25-40% chance that an earthquake with a magnitude of 6.0 or greater will occur within the next 50 years in the New Madrid Seismic Area, which is in western Tennessee. The Mid-America Earthquake Center at the University of Illinois estimates that a 7.7 magnitude earthquake along the New Madrid seismic zone would damage 256,000 buildings and cause $69 million in economic loss in Tennessee.
“It is a common misperception that earthquake coverage is provided in a typical homeowners or business insurance policy when, in fact, you need an earthquake insurance policy to cover home repairs after an earthquake,” said TDCI Commissioner Hodgen Mainda. “Unfortunately, consumers typically take earthquake insurance for granted until they experience a significant earthquake. I urge Tennesseans to assess their risk and learn more about earthquake insurance today.”
Because of Tennessee’s earthquake risk, TDCI shares the following information about protecting your home, your belongings, and your family from a potential earthquake:
Understand Your Needs
- Homeowners insurance covers damages from strong winds, falling objects, and lightning. Most policies do not cover damages from earthquakes or floods without an additional coverage rider or policy.
- Earthquake insurance is available to purchase in Tennessee. The state has more than 50 licensed companies selling earthquake insurance.
Earthquake Insurance Does Cover
- Repairs needed because of an earthquake’s damage to your house.
- The cost to remove debris.
- Extra living expenses while your home is being rebuilt or repaired.
- Structures not attached to your home, such as a garage, as well as your personal property, depending on your policy.
Earthquake Insurance Does Not Cover
- Anything already covered by homeowners insurance.
- Damage to your land, such as sinkholes from erosion or hidden openings under your land.
- Damage to your vehicles, but your car insurance policy might cover those damages.
- Water damage from external sources such as sewer or rain backup or flood.
- The exact materials used in your home – the insurance company will compare the replacement cost to siding materials, not brick or stone.
Earthquake Insurance Costs
- The cost of earthquake insurance depends on a number of factors, including the location, materials, the structure, and the size of the home.
- Brick homes, wood-frame homes with crawl spaces and multi-story homes are more likely to be damaged in an earthquake. Therefore, the cost to insure those homes is typically higher.
- The deductible for earthquake insurance is usually 10-20% of the coverage limit, meaning you are responsible to pay 10-20% of repair costs if your home is damaged in an earthquake.
- You may apply for federal disaster loans to help cover uninsured losses, but you are expected to repay the loan.
- You should speak with an insurance agent to determine the cost of a policy for your home.
Preparing For An Earthquake
During the ShakeOut drill, participants will practice the Drop, Cover, and Hold On technique, which is the proper self-protection measure in an earthquake. The technique’s actions are:
- DROP to the ground; take COVER under a sturdy desk or table, or cover your head and neck with your arms; and, HOLD ON until the shaking
- To help mitigate damage if an earthquake occurs, make sure your water heater, gas appliances and other fixtures are fastened securely. Fasten furniture and bookcases to walls.
You can also ask your insurance company to help you identify possible repairs and improvements to minimize damage.
- If you are considering purchasing earthquake insurance, always make sure you buy from a licensed agent and company. You can verify licenses at gov/insurance. For help with all things insurance in Tennessee, contact the Consumer Insurance Services Division at 615.741.2218 or 1.800.342.4029.
About the Tennessee Department of Commerce & Insurance
Protecting Tennesseans through balanced oversight of insurance and regulated professions while enhancing consumer advocacy, education, and public safety. Our divisions include the State Fire Marshal’s Office, Insurance, Securities, Regulatory Boards, Tennessee Law Enforcement Training Academy, Tennessee Emergency Communications Board, and TennCare Oversight.
To check a license of a professional regulated by the Department, go to http://verify.tn.gov/.