Insurance coverage that provides protection against earthquake damage to a structure, its contents or both. Usually available by endorsement or as a separate policy.
Earthquake insurance can be purchased as past of a fire insurance policy to cover some of the fire and other damage to housing and personal property caused by an earthquake, volcanic eruption or tidal wave. However, many policyholders waive coverage because of the high premiums. There are no policies which cover only earthquake damage. Insurance will pay for only 30-50% of quake-caused damage, with a maximum of 50 million yen paid out for a home and up to 10 million yen for personal property. The government will cover some of the damage caused by a major earthquake in cases where insurance companies alone can not meet all of the claims. Insurance companies quote premium rates calculated by the Fire and Marine Insurance Rating Association of Japan. The organization reported to the Financial Services Agency on March 1, 2001 that it would lower earthquake insurance premiums by an average 16%. *Refer to Property and Casualty Insurance Rating Organization of Japan.
Insurance that compensates for physical property damage resulting from earthquakes to an extent depending upon the terms of the policy.