CityWatch LA – California isn’t making earthquake insurance affordable — it’s making Californians gamble with their homes

Disaster Preparedness – California prides itself on its ability to prepare for disasters. However, when it comes to earthquake insurance, millions of homeowners are asked to roll the dice. Scientists estimate there is more than a 99 percent chance that California will experience one or more major earthquakes within the next three decades. Everyone knows that another devastating earthquake is coming.

Yet only about 13 percent of California homeowners carry earthquake insurance. And it’s not because Californians are reckless. This is because many simply cannot afford it. When insurance premiums cost thousands of dollars each year and deductibles can reach tens or even hundreds of thousands of dollars before coverage kicks in, many families decide they have no choice but to hope disaster never strikes. Hope is not public policy. It’s a gamble.

California leaders often talk about affordability, but too little attention has been paid to the one factor that ultimately determines insurance costs: risk. Insurance companies do not set premiums based on the policy; They base pricing policies on the probability and severity of future losses. The higher the risk, the higher the insurance premiums. If California really wants affordable insurance, it must become a less risky state.

The lesson should have been learned after the devastating 1994 Northridge earthquake. The disaster caused billions of dollars in losses, forcing many insurance companies to retreat from the California homeowners market and prompting the creation of the California Earthquake Authority to stabilize coverage.

This intervention succeeded in preventing a complete market collapse, but nearly three decades later we are still treating the symptoms rather than the underlying problem. Insurance doesn’t become affordable just because the government creates another program. Insurance becomes more affordable when expected losses decrease.

California has already proven that prevention works. Through the Earthquake Brace + Bolt program, nearly 40,000 homeowners have strengthened older homes against major seismic damage. Retrofitted homes are more likely to survive earthquakes with less structural damage, reducing insurance claims while helping families avoid financial disaster. This successful model should be expanded significantly. California should increase retrofit grants, provide low-interest financing, streamline local permitting, and require insurers to offer deep premium discounts to homeowners who invest in proven mitigation measures.

The same principle applies to California’s growing wildfire insurance crisis. The state cannot subsidize its way out of catastrophic losses from wildfires, nor can it police insurance companies to ignore financial reality. The answer is not endless political battles over bonuses, but rather reducing fundamental risks. Strengthening housing, creating defensible space, improving forest management, updating building codes, and investing in community resilience would do more to stabilize insurance markets than government mandates alone.

Lower risk leads to fewer losses, lower losses lead to lower insurance premiums, and lower insurance premiums encourage greater competition between insurance companies. This is how health insurance markets are supposed to work.

Consumers also deserve greater transparency. Millions of Californians mistakenly believe that their standard homeowners insurance policy covers earthquake damage. In most cases, this does not happen. This misunderstanding could financially devastate thousands of families after the next major earthquake. California must launch an aggressive statewide public education campaign so homeowners fully understand what is and is not covered before disaster strikes. The informed consumer is much better equipped to protect his family and financial future.

Disaster preparedness is much more than just responding to emergencies. It means reducing vulnerability before disaster strikes. Each proposal should be measured by one simple question: Does it reduce risks to California families? If yes, it deserves serious consideration. If the answer is no, it is unlikely to make insurance affordable in the long run.

California can’t prevent earthquakes, but it can prevent homeowners from being financially devastated by earthquakes. The next big earthquake is not a distant possibility, but inevitable. The real choice before us is whether we continue to ask Californians to gamble with the largest investment of their lives or whether we finally build an insurance system based on prevention, resilience, responsibility and common sense. This choice cannot wait until the ground begins to shake.

(Yonthan Mendel is an accomplished writer, scholar, and leading expert on Jewish-Arab relations and Middle Eastern affairs. He serves as Director of the Center for Jewish-Arab Relations at the Van Leer Institute in Jerusalem and as a Research Fellow at the Forum for Regional Thought. His work focuses on politics, identity, media, and regional dynamics in Israel and the broader Middle East. Widely respected for his scholarly analysis and public commentary, Mendel is a prominent voice on democracy, coexistence, public policy, and intercultural dialogue.)

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