When people think about the ground moving beneath them, they usually think of earthquakes. And while earthquake insurance is well-known, it’s not the full story. There’s a broader kind of protection called earth movement coverage, and in today’s changing world, it’s becoming more important than ever.
As climate patterns shift and weather events grow more intense, we’re seeing more land-related disasters in places that haven’t dealt with them before. From landslides to sinkholes, the risks are growing – and so is the need for better understanding of what insurance policies actually protect.
What’s Covered: Earthquake vs. Earth Movement
At first glance, earthquake insurance and earth movement insurance might sound similar, but the difference in what they cover is significant.
Earthquake insurance is straightforward. It covers damage caused by ground shaking from seismic activity. If a tremor cracks your building’s foundation, that’s an earthquake claim.
Earth movement coverage, on the other hand, is much more comprehensive. It includes earthquake damage but goes further. It covers landslides, mudslides, sinkholes, erosion, and even lava flows. The key is this: earth movement insurance covers any ground shifting, even if it’s not caused by an earthquake.
This distinction matters. Many natural disasters that cause severe damage don’t involve seismic shaking at all.
Common Misconceptions That Cost Money
One of the biggest misunderstandings happens after wildfires. In places like California, hillsides that have lost vegetation can become unstable during a rainstorm. The result is a mudslide or collapse, sometimes days after the fire is out and the rain has passed.
Even if the destruction is massive, it wouldn’t be covered by an earthquake policy, because there was no seismic activity. Earthquake insurance doesn’t apply unless the event started with ground shaking.
Another example is sinkholes, which are common in places like Florida. These aren’t caused by earthquakes, so they also fall under earth movement – and are often not included in standard policies unless specifically requested.
Coverage vs. Cost
Earth movement coverage is the gold standard, offering much broader protection. But that comes with a higher price tag.
For instance, earthquake insurance for a large commercial property may cost $25,000 to $50,000. Earth movement insurance, which adds coverage for all those additional risks, could easily double that amount.
Because of the cost, many clients stick with basic earthquake coverage, especially if they’re not part of a major development or large builder’s risk program. It’s the classic case of good, better, best – and earth movement is the best if you can afford it.
How Insurers Decide What to Offer
When insurers evaluate whether to offer earth movement coverage, they look at a few key factors: soil type, topography, and nearby features like hills, cliffs or water bodies.
For example, sandy soil in an old riverbed is more likely to liquefy during an earthquake, which would be covered under earthquake insurance. But if a saturated hillside collapses after a week of rain, that’s a landslide – something only earth movement coverage would protect against.
Today’s insurers use advanced tools to analyze risk, factoring in past events, soil stability, and slope data. And in areas where recent disasters have drawn attention to risks – like California’s cliff collapses or Appalachian mudslides – insurance may not even be available.
How Climate Change Is Increasing Risk
While earthquakes themselves aren’t caused by climate change, many earth movement events are indirectly tied to it. We’re seeing more wildfires, which strip away vegetation. After the fire, rain comes and loosens the soil. The result? More landslides and mudslides, sometimes long after the initial storm.
This growing risk isn’t limited to the West Coast. Areas like Texas, the Carolinas, and parts of the Southeast are now facing events they haven’t seen before. The need for broader coverage is spreading.
The Right Solution for You
For property owners in high-risk areas, earth movement coverage can be the difference between a covered loss and a devastating financial hit. As insured you should make an effort to understand the benefits of Earth Movement coverage. That said, not every business can afford it. So it’s vital to set clear expectations: if your policy only covers earthquakes, you need to understand that events like mudslides, erosion or sinkholes won’t be included.
Partner With Experts
You don’t have to navigate these complex risks alone. Partnering with an experienced insurance broker who understand this type of coverage can help structure the right policy from the start. Paperless Insurance has experts in understanding seismic risk and the full spectrum of earth movement exposures. We can guide our clients toward better protection, even if it means starting with basic earthquake insurance and building up as budgets allow.
When the ground shifts, it’s the details in the policy that make all the difference. Don’t wait for the disaster to find out what’s not covered. Take action now and ensure your assets are truly protected.