What Is Earthquake Insurance Inflation Guard? (And Why Your Coverage Keeps Increasing)

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April 13, 2025

If you’ve noticed that the dwelling coverage amount on your earthquake insurance policy increases each year—along with your premium—you’re not alone. This isn’t a billing error or upsell tactic. It’s actually a built-in feature known as Inflation Guard, and it’s designed to protect you.

Let’s break down exactly what Inflation Guard is, how it works, and what you can do to manage it.

What Is Inflation Guard in Earthquake Insurance?

Inflation Guard is a feature included in many earthquake (and home) insurance policies. Its purpose is to automatically increase your coverage each year based on the rising cost of rebuilding your home.

With the cost of materials, labor, and construction services rising due to inflation, the amount it would take to rebuild your home after an earthquake goes up over time. Inflation Guard ensures that your coverage keeps pace—so you’re not underinsured when it matters most.

How Does It Affect My Policy?

Each year, your insurance company will recalculate your dwelling coverage and other coverages based on its estimate of local construction cost increases. As your coverage limit goes up, your premium typically increases too.

This increase is not arbitrary—it reflects the real-world inflation affecting rebuilding costs in your area.

Can I Adjust My Coverage?

Yes! While Inflation Guard is automatically applied, you do have some control. At the time of policy renewal, or even before, you can contact your insurance agent to:

At Earthquake Agent, we work with you to review your policy annually and make recommendations based on your specific situation.

Why Does This Matter?

Being underinsured can leave you paying out-of-pocket for massive repair costs after an earthquake. On the other hand, blindly accepting rising coverage levels without review might leave you overpaying for coverage you don’t necessarily need.

That’s why it’s essential to stay informed and proactively manage your coverage—with the help of an expert if possible.

Let’s Talk About Your Earthquake Policy

At Earthquake Agent, we help homeowners:

✔️ Understand inflation guard and how it impacts their coverage
✔️ Customize their policies to match their home and financial needs
✔️ Prepare for the next earthquake—without overpaying

📍 Ready to review your policy or start a free quote?
Visit 👉 EarthquakeAgent.com

Final Thoughts

Inflation Guard is a valuable tool—but only when you understand how it works. Don’t let annual increases in coverage and premium catch you off guard. Be informed, be prepared, and make sure your earthquake insurance keeps up with reality—on your terms.