Does a landlord insurance policy cover earthquake damage in Memphis, Tennessee?

Generally no. The Tennessee Department of Commerce & Insurance says traditional homeowners and business insurance policies do not cover earthquake damage, and rental dwelling policies typically carry the same earth-movement exclusion. Earthquake coverage is bought separately, as an endorsement or a standalone policy, from a licensed Tennessee insurance producer. If a Shelby County, Tennessee owner's declarations page does not list earthquake coverage, the owner should assume there is none.

How much is an earthquake insurance deductible on a Shelby County, Tennessee rental?

According to the Tennessee Department of Commerce & Insurance, earthquake deductibles are usually 10% to 20% of the coverage limit rather than a flat dollar amount. On a Memphis, Tennessee rental insured for $200,000, that means the owner absorbs the first $20,000 at 10%, $30,000 at 15% or $40,000 at 20%. Depending on the policy, the dwelling, contents and outside structures such as fences may each carry a separate deductible.

What is the earthquake risk for Memphis and Shelby County, Tennessee?

The U.S. Geological Survey says Memphis lies within the New Madrid seismic zone, the most seismically active region in the Central and Eastern U.S., and estimates a 25-40% probability of a magnitude 6.0 or greater earthquake within 50 years. USGS also notes that seismic waves in this region do damage over a wider area than an earthquake of the same size in the western U.S. A damaging quake in any single year is unlikely, but it is not remote over a long rental hold.

Can a tenant break a lease if a Shelby County, Tennessee rental is damaged by an earthquake?

In Shelby County, Tennessee, where the Uniform Residential Landlord and Tenant Act applies, Tenn. Code Ann. 66-28-503 lets a tenant immediately vacate a unit whose use is substantially impaired by fire or casualty and give written notice of termination within 14 days. If repairs require the tenant to leave, the landlord may terminate within 14 days of written notice. Either way the landlord returns prepaid rent and the recoverable security deposit. Much of rural Fayette County, Tennessee falls outside URLTA, so the lease terms control there. This is general information, not legal advice.

Risk & Insurance · September 23, 2026

Your Landlord Policy Stops at the Fault Line: Earthquake Coverage and the Memphis Rental

Most Memphis rental owners can recite their hail deductible and roughly what the roof would cost. Very few can say what their policy pays if the ground moves, and the usual answer is nothing. Shelby County, Tennessee sits inside the New Madrid Seismic Zone, the standard dwelling and homeowners policy excludes earthquake damage, and the coverage that fills the gap comes with a deductible measured in percentages rather than dollars. None of that is a reason to panic. It is a reason to open the declarations page before the next renewal instead of after the next tremor.

What the science actually says about Memphis

The U.S. Geological Survey's Memphis Earthquake Hazard Mapping Project states the risk plainly: Memphis lies within the New Madrid seismic zone, which USGS calls the most seismically active and well-studied region in the Central and Eastern U.S., and scientists estimate a 25–40% probability of a magnitude 6.0 or greater earthquake within 50 years. USGS adds a detail that matters more to an owner than the headline number: the region has relatively low attenuation, meaning seismic waves do damage over a greater area here than an earthquake of the same size would in the West. The agency mapped the surface geology quadrangle by quadrangle for exactly this reason, including the Germantown quadrangle in Shelby County, Tennessee, because the soil under a house shapes how hard it shakes.

The Tennessee Department of Commerce & Insurance repeats the same 25–40% estimate in its Earthquake Awareness Month guidance, framed for the central United States as a whole, and notes that about 200 earthquakes occur in the central U.S. every year, most of them unnoticed. The honest reading: a damaging quake in any given year is unlikely, and over the 20- or 30-year hold that many Memphis investors plan for, it is not remote.

The exclusion most owners have never read

TDCI is direct about the gap: traditional homeowners and business insurance policies do not cover earthquake damage. A department spokesman made the same point to WKRN, warning that without an earthquake policy an owner simply has no claim to make. For a rental that usually means a dwelling-fire or landlord form rather than a homeowners policy, but look for the same language: an "earth movement" exclusion. If your declarations page does not list an earthquake endorsement or a separate earthquake policy, assume you do not have one.

Two neighbors of that exclusion are worth checking on the same read. Flood is also typically excluded and sold separately, which matters near the Wolf River and Nonconnah Creek. And your policy covers your building, not your tenant's belongings; a resident who loses a television and a sofa in any casualty is relying on renters insurance, not on you.

An earthquake deductible is a percentage of the coverage limit, not a flat number. On a rental insured for $200,000, the first $20,000 to $40,000 of damage is yours.

The deductible math, worked

TDCI's guidance says earthquake deductibles are usually 10% to 20% of the coverage limit, and gives the example of a home insured for $200,000 carrying a $20,000 deductible at 10%. Run that on a typical single-family rental:

Dwelling limit $200,000, 10% deductible: you absorb the first $20,000.
Same limit, 15% deductible: $30,000.
Same limit, 20% deductible: $40,000.

TDCI also warns that, depending on the policy, the dwelling, contents and outside structures such as detached garages and fences may each carry their own deductible. A moderate quake that cracks a foundation, drops a chimney and takes down a fence line can therefore trigger more than one. The practical conclusion is that earthquake coverage is catastrophe coverage. It will not pay for plaster cracks. It exists for the loss that would otherwise end the investment, and that is how to price it when your agent quotes it.

What happens to the lease if the house is unlivable

Insurance is half the problem; the other half is the tenancy. In Shelby County, the Uniform Residential Landlord and Tenant Act applies, and Tenn. Code Ann. § 66-28-503 covers fire or casualty damage. If the unit is damaged badly enough that its use is substantially impaired, the tenant may vacate immediately and must notify the landlord in writing within 14 days of the intent to terminate; the lease ends as of the date of vacating. If restoring the unit requires the tenant to leave, the landlord may terminate within 14 days of giving written notice. Either way, the landlord returns all prepaid rent and the recoverable security deposit, with rent accounted for as of the date the keys come back or the tenant actually leaves, whichever is earlier.

Read that as an owner: the rent stops the day the tenant walks out, the deposit goes back under the same rules we covered in the security deposit article, and the mortgage, taxes and insurance keep running. That is why the question to ask your agent is not only "do I have earthquake coverage" but "does it include loss of rents, and under which deductible." In Fayette County, Tennessee, most rural addresses sit outside URLTA, so the casualty terms in your written lease carry more of the weight. Make sure the lease says what happens if the house cannot be lived in.

A renewal-season checklist for Shelby and Fayette County owners

Pull the declarations page for every rental and look for an earthquake endorsement or separate policy. No listing means no coverage.
Get the deductible as a percentage and as dollars, and ask whether dwelling, other structures and loss of rents each carry their own.
Ask whether fair rental value is covered after an earthquake, not just after fire or wind.
Weigh the deductible against your reserves. If a 10% deductible on your largest property exceeds your cash cushion, that is a financing problem as much as an insurance one.
Secure the heavy items in the building you control: the water heater strap, a top-heavy shelving unit in a common area, anything mounted high. TDCI's own guidance recommends securing heavy objects and fixing structural issues that could lead to collapse.
Require renters insurance in the lease so your tenant is not uninsured after any casualty.

This fits into the broader cost picture we laid out in the insurance and taxes article: owners who shop only on price can end up with a cheaper policy that quietly excludes more.

Where our team fits

Homefront is not an insurance agency and does not sell or recommend coverage; a licensed Tennessee insurance producer should quote and explain any policy. What our team does is run the property side: keeping the lease terms, deposit accounting and notices in order when a casualty hits, and getting a damaged unit back on the market once repairs are done. If you own in Memphis, Germantown, TN or elsewhere in Shelby County, you can send us your declarations page and we will point out what to ask your agent. Management fees at Homefront never exceed 10% of monthly rent, with a customized schedule by portfolio size and no hidden charges; tenant screening is paid by the applicant, and under our lease tenants are responsible for legal fees arising from a breach.

Sources & further reading: U.S. Geological Survey — Memphis Earthquake Hazard Mapping Project; Tennessee Department of Commerce & Insurance and TEMA — Use Earthquake Awareness Month to Learn More about the Importance of Insurance (February 3, 2025); WKRN — A primer on earthquake insurance for Tennessee homeowners; Tenn. Code Ann. § 66-28-503, Fire or casualty damage. This article is general information about insurance and Tennessee landlord-tenant law as it applies in Shelby County and Fayette County, Tennessee, not legal or insurance advice. URLTA applies only in Tennessee counties over 75,000 population; confirm coverage terms with a licensed Tennessee insurance producer.