The recent series of minor earthquakes that occurred in Morris County, NJ may have made you wonder if your Homeowners insurance would cover damage caused by Earthquake. The simple answer is no; all Homeowner policies exclude loss caused by Earth Movement, which includes earthquake, landslide, mudslide, subsidence or sinkhole.
However, there may be coverage for ensuing loss such as fire or explosion. So, if earth movement causes your gas line to shift and an explosion or fire occurs, you can look to your Homeowners policy. But a significant earthquake that causes major cracks, structural damage or even collapse would not be covered.
Almost all Homeowners carriers offer Earthquake coverage. The premium can be significant depending on the value of the dwelling coverage on the policy. Please check with your Account Manager if you would like a quote to add Earthquake coverage.
How likely is an earthquake in New Jersey? Northern New Jersey contains the longest fault line in the Northeast: the Ramapo fault. It begins in Pennsylvania and runs through Hunterdon, Somerset, Morris, Passaic and Bergen counties before ending in Westchester County in NY.
Wayne Guglielmo, writing for New Jersey Monthly (6/10/2010) did an excellent job researching the history of earthquakes in New Jersey. He states that in the past 230 years, New Jersey has been at the epicenter of 170 earthquakes. The largest was an estimated 5.3 magnitude quake in 1783 that probably occurred in Sussex County. (The Richter Scale was only introduced in 1935 so for prior earthquake scientists made guesses based on newspaper articles and other accounts). The largest earthquake in modern times was a 3.5 magnitude quake that hit near Milford in Hunterdon County in 2003. This resulted in very little damage; some residents noticed their water appeared muddy and were warned to boil their water for several days after the tremor.
In the NJ Monthly article, Guglielmo says that while scientists don’t all agree, the Greater New York – Philadelphia area is considered to be of “low earthquake hazard but high vulnerability”. He summarizes: “The Big One isn’t likely here but (given the amount of infrastructure we have) if it comes, watch out.”
At MGB we are neutral about whether buying Earthquake insurance is a good idea. Our main objective is to tell you that a standard Homeowners policy does not cover Earthquake, but that coverage can be quoted if you are interested. At that point, it becomes a question of your tolerance of risk versus the cost of insurance.