The recent earthquakes in Colorado and Virginia were an eye-opener for many of our customers. We have had several calls from concerned policyholders wondering about the possibility of an earthquake in the Las Vegas area. We don’t normally associate earthquakes with Las Vegas, but you should know that most of Nevada, including Clark County, is considered to be seismically active. In fact, we are considered to be the 3rd most active state, after Alaska and California. The Reno area has a slightly greater potential for a magnitude 7.0 or higher quake, but there are also 8 active faults around the Las Vegas area capable of producing a large earthquake. In fact, the Nevada Seismological Laboratory at UNR says they have identified active faults at the base of nearly every mountain range in Nevada, with the most active fault lines just east of the Sierra Nevada mountains. The Frenchman Mountain fault is right in our backyard and is capable of producing quakes in the 5.5 to 6.0 magnitude.
Luckily, strong earthquakes in Nevada are rare, especially compared to our western neighbor California. Rare, in this case, means the average time between strong quakes is expected to be 1,000 to 10,000 years. Of course, no one can accurately predict when the next “big one” will happen. Which naturally brings us to the blog topic: Nevada earthquake insurance. Typical homeowner and commercial property insurance policies exclude damage caused by “earth movement”. The language will vary slightly from one policy to the next, but the typical exclusion reads as follows:
Earth Movement means:
a. Earthquake, including land shock waves or tremors before, during or after a volcanic eruption;
b. Landslide, mudslide, or mudflow;
c. Subsidence or sinkhole; or
d. Any other earth movement including earth sinking, rising or shifting;
caused by or resulting from human or animal forces or any act of nature unless direct loss by fire or explosion ensues and then we will pay only for the damage caused by the ensuing cause of loss. (ISO HO-3 homeowner policy, 08/01 edition)
You will notice this verbiage also excludes damage from landslides, subsidence, and sinkholes. The intent of the exclusion is clearly to remove coverage for any type of earth movement, not just earth quakes. Subsidence is a particular concern in Southern Nevada because much of our soil is expansive and can cause foundation edge lift or shifting and structural damage to the home.
Unlike flood insurance, which must be purchased thru the FEMA-administered program, coverage for earth movement is typically available by endorsement on a homeowner or commercial property policy. The coverage typically has a rather large deductible such as 5 or 10% of the dwelling coverage amount. The premium for this coverage will vary between insurers but expect it to be around 25% to 40% of the base policy premium. There are also options to remove coverage for non-structural damage to masonry veneer (such as faux stone or brickwork) that can reduce the cost of earth movement coverage. The Nevada Insurance Commissioner has published a guide to earthquake insurance that contains very helpful information about earthquake insurance. Get a copy of here by clicking here.
If you are interested in a quote for earthquake insurance for your property located in Las Vegas, North Las Vegas or Henderson, please contact us today.