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Earthquake insurance for a rental property: do landlords need it?

DoorKeeping team

3 min read

Standard landlord policies exclude earth movement, so an earthquake that damages your building is generally not paid unless you bought separate earthquake cover. That cover typically has a deductible set as a percentage of the building's insured value, not a flat dollar amount, which can make the out-of-pocket cost large. Whether to buy it depends on where the property is, how it is built and what reserves you hold.

Why a standard policy does not pay

Property policies list earth movement, which includes earthquake, landslide and sinkhole, as an exclusion. Fire that follows an earthquake is often still covered as a fire loss, but the shaking damage, a cracked foundation or a collapsed chimney, is not. Earthquake cover is sold as an endorsement on some policies and as a separate policy on others, and in California a state-created authority sells policies through participating insurers.

Terms differ by company and state. Ask for the actual policy wording, not a summary.

For a landlord the practical question is what happens to the rent roll. A building that is red-tagged after a quake produces no income while the mortgage, taxes and insurance continue. Loss of rent after an earthquake is often not covered by a standard policy, because the cause of loss is excluded. If you buy earthquake cover, ask in writing whether it includes lost rent and for how many months.

How the percentage deductible works

Earthquake deductibles are usually a percentage of the coverage amount, often chosen from a range the insurer offers. A higher percentage lowers the premium but increases what you pay after a quake. The California Earthquake Authority explains its options on its website. Check your own quote for the range available to you.

Example a made-up owner insures a fourplex for $500,000 against earthquake with a 15 percent deductible. The deductible is 15 percent of $500,000, or $75,000. If a quake causes $120,000 of covered damage, the policy would pay $45,000 and the owner would carry the first $75,000. At a 10 percent deductible the owner would carry $50,000 and the policy would pay $70,000, usually for a higher premium.

Many earthquake policies also set limits on contents, additional living expenses, outbuildings and masonry. Loss of rent may be a separate item. Ask for each.

How to decide whether to buy it

  1. Check the risk where the property sits. Your state geological survey and the USGS publish hazard maps.
  2. Look at how the building is built. Unreinforced masonry, soft-story apartment buildings and homes on raised foundations without bracing can be more vulnerable. Some jurisdictions require retrofits.
  3. Compare the premium and deductible with the cash you could put into repairs. A 15 percent deductible means you need that cash anyway.
  4. Check your mortgage. In some regions lenders require it. Read your loan documents.
  5. Think about rents. If a quake makes a unit unusable for months, can you still pay the mortgage?

A retrofit can lower both the risk and, with some insurers, the cost. Ask your agent which retrofits earn a credit.

If a quake happens

  • Make sure everyone is safe. Gas leaks and unstable structures are the first priority.
  • Photograph damage and keep receipts for emergency repairs. Protect the property from further damage.
  • Contact your insurer and the earthquake carrier if they are separate. Ask about the claim deadline.
  • Tell tenants in writing what is unsafe and what you are doing, and check your state's rules about rent and habitability after damage.

This is general information, not insurance or legal advice. Your policy wording, your state and your licensed agent or attorney decide what applies to you.

How DoorKeeping handles it

Keep the policy, retrofit invoices and engineer reports as documents under each property, and open a work order per damaged unit so photos, notes and vendor visits are dated. Messages to tenants by email are saved with the property. DoorKeeping does not sell insurance or decide coverage.

Sources

  1. California Earthquake Authority, earthquake insurance basics, read Oct 31, 2026
  2. Insurance Information Institute, consumer guides on insurance, read Oct 31, 2026
  3. NAIC, National Association of Insurance Commissioners, consumer information, read Oct 31, 2026

Questions

Does landlord insurance cover earthquake damage?
Generally no. Earth movement is a standard exclusion, so earthquake cover is a separate policy or endorsement. Fire after a quake may still be covered as a fire loss.
Why is an earthquake deductible so high?
It is usually a percentage of the insured value rather than a flat sum, so a larger building has a larger deductible. Choose one you could afford to pay.
Do I need earthquake insurance if I do not live in California?
It depends on local risk and your lender. Earthquake risk exists in many states, so check hazard maps and ask your agent.

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