What does FEMA do for Earthquakes? - Quake Insurance (2024)

FAQs

What does FEMA do for Earthquakes? - Quake Insurance? ›

While FEMA does not typically provide direct financial assistance for earthquake damage, it may offer grants to help homeowners or renters elevate their homes to reduce future earthquake risks. These grants are designed to mitigate the impact of potential future disasters and enhance the community's resilience.

Traditional earthquake insurance covers damage caused by an earthquake by insuring “pure loss.” That means they will assess the value of the items lost and reimburse you for that specific amount – this amount will be different for different people.

FEMA makes federal funds available annually through its NEHRP State Assistance Grant Program. This grant program is made to individual states and territories at high and very high-risk of earthquakes, and nonprofit organizations as defined by Title 2 Code of Federal Regulations (C.F.R.)

If you live near an active fault line, and earthquakes happen with relative frequency, it might be worth it to get earthquake insurance. Additionally, if there was an earthquake that caused significant damage in an area within the past few decades, it might be worth considering.

When determining the amount of money you will receive, FEMA looks at your actual loss. Actual loss is determined by adding all the physical damage done, and costs necessary to repair that damage. As well as including displacement costs for you while your home is being repaired.

In the case of an earthquake that destroys an entire home, FEMA may provide financial assistance to cover the costs of temporary housing and other necessary expenses. However, no amount is guaranteed and even the maximum assistance provided by FEMA will not cover the full cost of rebuilding a home.

As a general range, annual earthquake insurance premiums can fall anywhere from $800 – $5,000, and policy deductibles can be as high as 10% – 20% of your coverage limit.

Is earthquake insurance tax deductible? Generally, you can't deduct the cost of insurance you buy for your primary residence. If you use your property for rental income, however, you may be able to deduct the cost of insurance.

A poll by the Insurance Information Institute indicated that only 11% of American homeowners had earthquake insurance. Overview: There are several key reasons why many people do not obtain earthquake insurance.

If you have insured your house, you'll be able to use the insurance money to buy a new house. If you chose not to insure your house against earthquakes, that's a risk you are entitled to take, but it means that paying for a new house is your own responsibility.

What's the most FEMA will pay? ›

FEMA assistance is not the same as insurance. FEMA assistance only provides funds for basic work to make a home livable, including items such as toilets, roof, critical utilities, windows, and doors. For fiscal year 2023, the maximum amount of financial assistance is $41,000 for Home Repair.

Between 2016 and 2022, the average FEMA disaster assistance grant award was $3,000. In the same period, the NFIP paid an average claim amount of more than $66,000. In some cases, policyholders may be eligible to couple their flood insurance claims with federal disaster assistance.

Critical Needs Assistance is limited to a one-time $700 payment per household. Maybe you were displaced from your primary residence or you need help to move from your pre-disaster primary residence to temporarily shelter elsewhere.

Earthquakes and coverage

Homeowners and renters insurance does not cover earthquake damage. A standard policy will, however, generally cover losses from fire following a quake and, if such a fire makes your home unlivable, cover the additional living expenses incurred while you live elsewhere during repairs.

Key Takeaways: Homeowners insurance typically covers foundation damage caused by a covered peril, such as fire, vandalism, falling objects, or certain natural disasters. Damage from normal wear and tear, insufficient maintenance, or ground settling is usually not covered.