California Earthquake Insurance: Requirements, Coverage, and Cost

While earthquake insurance is optional in California, home insurance companies must offer it to new home buyers. Earthquake insurance covers your home and personal belongings and provides coverage against loss of use. You can purchase earthquake insurance through a homeowner’s insurance provider. Load something that is being loaded.

California has a reputation as the earthquake capital of the United States. However, only 10% of Californians have earthquake insurance, according to the Federal Emergency Management Agency (FEMA). Many homeowners are unprepared for the financial losses associated with earthquakes, which are not covered by standard homeowners insurance policies. If you are a Californian and live near a major fault line, you can protect yourself with earthquake insurance.

Is earthquake insurance required in California?

Glenn Pomeroy, CEO of the California Seismic Authority (CEA), the largest provider of earthquake insurance in the United States, says California homeowners are not legally required to purchase earthquake insurance, and mortgage lenders do not require it. However, California law makes it mandatory for providers like State Farm and Allstate to proactively offer earthquake insurance along with a homeowners insurance policy for new homebuyers, according to Pomeroy.

Homeowners insurance will not cover earthquakes. You must purchase a separate policy to get coverage. Given the large number of damaging earthquakes in California each year, it is wise to consider carefully doing so.

Here are a few things you should take into consideration to determine if you need an earthquake insurance policy, according to the USGS:

The location of your home from active earthquake faults, the frequency of earthquakes in your area, when the last earthquake occurred, the materials in your home’s building and foundations, the architectural structure of your home, and the quality of your home’s workmanship What is covered by California earthquake insurance?

Earthquake insurance covers the cost of replacing and repairing your home and contents after an earthquake. It will also cover any additional living expenses you incur if your home becomes temporarily uninhabitable.

Earthquake insurance only covers losses caused by ground movement or landslides. Will not cover fire and water damage. Your home insurance policy covers this. Earthquake insurance will not pay for flood damage, which requires separate coverage.

How much does earthquake insurance cost in California?

“Earthquake insurance can cost anywhere from $730 to $2,000,” Pomeroy says. The cost varies based on several factors, such as your home and building materials. Earthquake insurance is not available as a stand-alone policy and must be purchased along with the homeowner’s insurance policy.

Deductibles from earthquake insurance are typically 5% to 15% of an earthquake insurance policy limit, according to the Insurance Information Institute. It’s generally higher than the deductibles for a homeowner’s insurance policy.

While earthquake insurance can be very expensive, especially in high-risk areas, you can still reduce your premiums through mitigation efforts. CEA, for example, offers a discount on older wood-framed homes with raised or non-board foundations. Many providers also offer discounts on seismically modified homes.

How to buy earthquake insurance in California

The CEA recommends taking these steps to purchase insurance in California.

Step 1: Know your risks

Knowing how vulnerable your area is to earthquakes is the primary consideration when deciding if you need earthquake insurance. FEMA provides seismic maps that illustrate this. The colors on the maps indicate the area’s risk levels, also known as the seismic design categories.

Source: FEMA

Step 2: Get a free cost estimate

The cost of your policy varies based on several factors. You can get an excellent grade by using our free CEA Premium Calculator.

You will be asked a series of questions about your home, such as your address, the year your home was built, how much your homeowners cover, and the type of roof and foundation in your home.

After that, you will see your estimated monthly premium. You can adjust the deductible, personal property, loss of use coverage, and add coverage to your policy if you wish.

Quick tip: About two-thirds of California homeowners insurance providers are CEA members. See a list of them here.

Step 3: Contact your insurance company

You should purchase an earthquake insurance policy through your residential insurance company. Once you have an earthquake insurance estimate, talk to your insurance agent, and they will process your application.

Your provider will also manage your premium payments and policy renewals. In addition, they can help you file a lawsuit if the earthquake damaged your property.

Note that most insurers won’t sell new policies for a certain period of time after an earthquake—usually 30 to 60 days, according to the National Association of Insurance Commissioners. The best time to purchase an insurance policy is before an earthquake occurs.

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