Seeing a 10% deductible on an earthquake insurance quote might not seem alarming at first. But on a home insured for $400,000, that could mean being responsible for $40,000 in covered damage.

That is a big difference from the $1,000 deductible you may be used to on your homeowners policy.

Before choosing earthquake coverage, turn the percentage into dollars. It makes the quote easier to understand and helps you plan for the repair costs you would need to handle yourself.

What does earthquake insurance cover?

Earthquake insurance helps pay for covered damage caused by earthquake shaking. Standard U.S. homeowners policies generally exclude this damage, so you usually need a separate policy or an endorsement that adds coverage to an existing policy.

Depending on the coverage you choose, a policy may protect your home, belongings, and extra living costs if earthquake damage forces you to move out.

It is not just for homeowners. Renters can buy protection for belongings and temporary living expenses. Condo owners may also need coverage for certain repair assessments, or charges, from their homeowners association.

This guide focuses on U.S. residential policies. Coverage and deductible rules vary by insurer and state.

How do earthquake insurance deductibles work?

An earthquake insurance deductible is your share of a covered loss. For coverage subject to that deductible, the insurer generally pays only when covered damage exceeds it.

Many policies calculate the deductible as a percentage of the applicable coverage limit. This is the amount of insurance listed for that part of your policy.

The National Association of Insurance Commissioners says earthquake deductibles are usually 10% to 20% of the coverage limit. Other options exist, depending on the insurer.

California Earthquake Authority policies, for example, offer deductible options from 5% to 25%, although some homes are not eligible for the lower percentages.

The detail to remember is this: a 10% deductible usually means 10% of the relevant insured amount, rather than 10% of your repair bill.

Turn your deductible into a dollar amount

To calculate your deductible, multiply the applicable coverage limit by the deductible percentage. You can usually find both on your policy’s declarations page, which summarizes your coverage.

For example, if your policy uses a $400,000 dwelling coverage limit to calculate the deductible:

• 5% deductible: $400,000 × 0.05 = $20,000
• 10% deductible: $400,000 × 0.10 = $40,000
• 15% deductible: $400,000 × 0.15 = $60,000
• 20% deductible: $400,000 × 0.20 = $80,000

These figures are examples. Available deductible options vary by insurer and policy.

Here is how that could affect a claim: with a $40,000 deductible and $100,000 in covered dwelling damage, the insurer would generally pay $60,000 toward the loss.

If covered dwelling damage totaled $25,000, dwelling coverage would not pay because the damage falls below the deductible. Other benefits, such as temporary living expenses, may still apply under their own terms.

These simplified examples assume all damage is covered and no other policy terms affect the payment. Ask your agent how the deductible would apply to a total loss, since losses above your coverage limit may be handled differently.

Do you have to pay the deductible upfront?

You do not necessarily write a check to the insurer before receiving help. CEA, for example, subtracts the deductible from the covered loss when calculating a claim payment.

In the $100,000 damage example, that means a $60,000 insurance payment after the $40,000 deductible. You would still need a way to cover the remaining repair costs.

Your deductible is separate from your premium, which is the price you pay to keep the policy active. Ask your insurer how payments are issued and whether any repair-related requirements apply.

Your house and belongings may have different deductibles

One earthquake does not necessarily mean one deductible for everything damaged.

Policies may apply separate deductibles to your home, belongings, or other insured structures. Others link certain coverages together.

CEA’s Standard Homeowners policy requires the dwelling deductible to be met before covered personal property payments can be made. Its Homeowners Choice policy allows a separate belongings deductible, which is waived when the dwelling deductible is met.

Imagine shaking damages your furniture and electronics but leaves the house mostly intact. Whether your policy pays for those belongings may depend on how its deductibles are arranged.

Ask your agent to walk through that situation. A real example can tell you more than the percentage alone.

Can temporary housing be covered below the dwelling deductible?

Under some policies, yes. Loss-of-use coverage may help with eligible extra living expenses even when structural damage falls below the dwelling deductible.

CEA’s loss-of-use coverage has no deductible. If you have that coverage and meet its conditions, it may help when earthquake damage makes your home unsafe to occupy or a civil authority prevents entry because of earthquake damage.

Eligible costs can include temporary housing and increased meal expenses. Coverage limits and other conditions still apply.

That can make a difference when you need somewhere to stay while continuing to pay your mortgage. Check your policy’s rules before assuming the dwelling deductible blocks every benefit.

Will aftershocks mean another deductible?

Aftershocks may be grouped with the first earthquake as one insured event. Your policy defines the time window.

The NAIC notes that policies commonly group earthquakes within a 72-hour period. The window varies, and shaking outside it could mean another claim and another set of deductibles.

Ask how your insurer defines an earthquake event. One deductible does not necessarily last for the whole policy year.

Choosing a deductible you could manage

A lower premium can be appealing, especially when household costs are already high. But check what you are agreeing to cover yourself.

Insurance Journal has noted that homeowners can often lower their annual earthquake insurance premium by accepting a higher deductible. The tradeoff is a larger share of the loss if damage occurs.

Compare quotes using the same coverage limits, then ask:

• What is each deductible in dollars?
• Which coverages have separate deductibles?
• Can temporary living expenses be paid below the dwelling deductible?
• What damage or property is excluded?

Consider what your finances might look like after an earthquake. You could be facing repair costs, a temporary move, and time away from work together.

Choose with that situation in mind, rather than looking only at the annual price.

What if the damage looks smaller than your deductible?

Let your insurer know even if visible damage seems minor. A qualified professional may need to check for hidden structural damage before you know the full repair cost.

Photograph damage when safe, keep receipts, and follow your insurer’s claim instructions. You do not need to decide on your own whether the loss will exceed the deductible.

Know your share before you need to claim

A percentage is easy to skim past on a quote. Its dollar amount deserves a closer look.

Before buying earthquake insurance, understand how the deductible applies to your home, belongings, temporary housing, and aftershocks. IZC Insurance can help you review those details so you can weigh the protection against the costs you may need to cover yourself.