California earthquake insurance is an important tool for protecting your finances if you own or rent a home in the Golden State. Notably, damage from seismic activity is not covered by a standard California homeowners insurance policy, leaving many Californians at financial risk.
According to the Federal Emergency Management Agency (FEMA), only 10% of California residents have earthquake insurance despite the fact that the state experiences 90% of the country’s earthquakes. The California Earthquake Authority (CEA) further highlights the need for earthquake insurance, reporting that there’s a 99% chance that California will experience one or more serious earthquakes (magnitude 6.7 or greater) in the next 30 years.
What is California earthquake insurance?
Earthquake insurance is a type of homeowners insurance that protects you financially if your home or your personal belongings are damaged by an earthquake. Seismic activity is not covered by standard home insurance, so you’ll either need to add coverage through an endorsement on your policy (an optional “add-on”) or purchase a separate policy.
Earthquake insurance is especially important in California, where the San Andreas fault stretches more than 800 miles, with many more branching and connecting faults that threaten seismic activity. Other faults include the Hayward and Calaveras in Northern California and the Rose Canon, San Jacinto, and Elsinore faults in Southern California.
Renters and condo owners can also purchase earthquake insurance to protect their personal belongings and (for condo owners only) the interior of their units. Condo owners and homeowners with HOAs may also want to consider loss assessment coverage.
In the Golden State, the California Earthquake Authority — a privately funded, publicly managed nonprofit — offers residential earthquake insurance policies through participating residential insurance companies and helps manage seismic retrofit programs. To protect residents, California state law requires homeowners insurance companies to offer their existing customers earthquake insurance every other year, in writing. You then have 30 days to accept or decline the offer.
Is earthquake insurance required in California?
Earthquake insurance is not required in California, even if you have a mortgage. While you’re required to carry standard homeowners insurance if you’re still paying off your home, earthquake insurance is optional.
That said, earthquake insurance is the best way for Californians to protect their finances in the event of damaging seismic activity. According to Angi, a home services company, average earthquake damage repair costs can range from $2,000 to $60,000.
Understanding what earthquake insurance covers
Earthquake insurance covers costs associated with damage from qualifying seismic activity, including damage to your home, as well as your belongings. It may also cover additional living expenses, emergency repairs, and necessary home upgrades.
Here’s a closer look at what earthquake insurance covers.
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Dwelling coverage: Much like a standard homeowners insurance policy, earthquake insurance includes dwelling coverage, which pays repair or rebuild costs resulting from covered damage to your home, its key systems and appliances, and attached structures (like garages).
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Personal property coverage: Earthquake insurance also includes personal property coverage, which helps pay for damage to your belongings, including electronics, furniture, small appliances, and other items.
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Loss of use: Also called additional living expenses, loss of use coverage helps pay for lodging, transportation, and related expenses if you must temporarily vacate your home due to covered earthquake damage.
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Emergency repairs: Policies may also cover debris removal or urgent repairs that are needed to prevent further damage to your home, like replacing a broken window.
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Building code upgrades: If your California home was built before newer California building codes, you may be required to rebuild or make significant repairs to your home following earthquake damage. Earthquake insurance might help cover this.
Your earthquake insurance deductible is the portion of a covered loss you're responsible for. It's usually subtracted from your claims payout rather than paid upfront. According to the Insurance Information Institute, earthquake insurance deductibles typically range from 2% to 20% of your dwelling coverage amount. CEA policy deductibles max out at 25%.
Your dwelling coverage amount is listed on your declarations page, so you can do the math before an earthquake ever happens. For example, if your home is insured for $400,000 and your deductible is 10%, you'd be responsible for the first $40,000 of a covered loss — meaning a $100,000 claim would result in a $60,000 payout. If the damage comes in under $40,000, no payout would be issued at all. The higher your deductible, the lower your cost of coverage (called your premium), but the more you'd owe out of pocket after a significant loss. It's worth knowing your number before you need it.
What is excluded from earthquake insurance?
Earthquake insurance can be a game-changer following damage from seismic activity, but not all damage is covered. Here are some notable insurance exclusions to be aware of:
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Fire damage: Earthquake insurance won’t cover damage from fire, even if it was caused by an earthquake. The good news? By law in California, standard homeowners insurance includes coverage for fire damage, even from earthquakes.
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Landscaping and exterior features: Traditional homeowners insurance covers damage to features like fences, pools, and patios, but earthquake insurance isn’t quite the same. According to the California Department of Insurance, earthquake policies (including insurance through the CEA) excludes coverage for “landscaping, pools, fences, masonry, or separate buildings.”
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Vehicles: Damage to your vehicle is excluded from earthquake insurance. Instead, your comprehensive coverage — part of a full-coverage auto insurance policy — should cover vehicle damage from earthquakes.
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Land damage: Earthquake insurance doesn’t typically cover damage to the land itself, including sinkholes, soil erosion, landslides, and ground stabilization beneath the home.
How much is earthquake insurance in California?
California earthquake insurance costs vary significantly by location and home type. The CEA's premium calculator can give you a personalized estimate. Here are some factors that affect costs.
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Where you live: Your home’s location relative to fault lines will impact the cost of your earthquake insurance. If you live closer to active fault lines, your policy will likely be more expensive.
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Your home’s age: Older homes built before modern building codes generally cost more to insure, as they might not withstand earthquake damage as well as newer homes. Plus, there’s a greater chance of the home needing upgrades to be compliant with California building codes when repairs are necessary.
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Your home’s construction and foundation type: Similarly, how your house is constructed impacts how well it fares in earthquakes. Unreinforced masonry homes are more vulnerable to cracking and collapse than wood-framed homes, for example. Insurers also consider whether your home is properly bolted to its foundation.
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Soil and roof types: Properties built on softer soils are more susceptible to ground shifts and therefore may cost more to insure. Similarly, heavy roofing materials, such as tile or slate, can increase risk by adding structural weight.
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Coverage limits and deductibles: The higher your dwelling coverage limit and the lower your deductible, the more you should expect to pay for earthquake insurance.
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Discounts: You might qualify for an insurance discount if you’ve retrofitted your older home to better handle earthquakes. Seismic retrofits can result in anywhere from a 10% to 25% discount with CEA, depending on your home’s age.
Is earthquake insurance worth it in California?
For many Californians, earthquake insurance is well worth the cost. After all, the state experiences 90% of all U.S. earthquakes, and the average earthquake repair can cost as much as $60,000. While the Federal Emergency Management Agency offers federal disaster assistance after earthquakes, grant payments typically fall well below the actual cost to rebuild your home. Insurance fills that gap.
That said, you’ll need to weigh your options carefully. Getting several quotes to understand how much earthquake insurance would cost you is a good place to start. And make sure you understand how your deductible works to avoid sticker shock in the event of a claim.
How to mitigate earthquake damage in California
Earthquake insurance can help cover the financial fallout after a quake. But a few practical steps can help reduce damage in the first place.
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Retrofit your home: Older houses on raised foundations can shift during a tremor. Bolting your home to its foundation and reinforcing the crawl space makes it much safer, and a qualifying retrofit can earn you a discount on your earthquake insurance policy.
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Secure heavy furniture: Large items like bookshelves, water heaters, and major appliances can easily topple over. Use furniture anchors or safety straps to secure them directly to wall studs to prevent injuries and property damage.
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Store breakables and hazardous materials safely: Keep flammable or toxic materials in low, closed cabinets. Use quake putty or cabinet latches to keep dishes, glassware, and other fragile items from falling.
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Know how to shut off utilities: Gas leaks are a leading cause of fires after an earthquake. Ensure everyone in your household knows where the main gas valve is and how to turn it off, and keep a wrench stored nearby.
Frequently asked questions
Can renters and condo owners get California earthquake insurance?
Yes, renters and condo owners can also purchase California earthquake insurance. Renters may want earthquake insurance to cover damage to their personal belongings and even cover additional living expenses if they must temporarily relocate. Condo owners can also benefit from coverage for the interior of their unit and coverage to help pay a homeowners association assessment if the building or any shared spaces are damaged.
What is the difference between standard and choice policies?
A standard earthquake insurance policy through the California Earthquake Authority bundles the core coverages (dwelling, personal property, and loss of use) into one policy with shared deductible options. Choice policies, on the other hand, allow you to customize various coverages separately, including declining some coverage types or selecting different deductibles.
Does earthquake insurance cover water damage from a broken pipe?
Earthquake insurance typically covers water damage from a broken pipe if that pipe bursts as a result of the earthquake and results in water damage inside your home. However, if the pipe bursts for any other reason, earthquake insurance does not apply.
Is there a waiting period to buy an earthquake policy?
The California Earthquake Authority (CEA) allows you to buy earthquake insurance at any time from any of its participating insurers, despite rumors that there may be an insurance moratorium following a quake. However, the CEA does clarify that if you buy a policy after an earthquake, you won’t get coverage for the next 360 hours (15 days) for any earthquakes that are “seismically related” to the initial quake.
That said, it’s always wise to get insurance well before an earthquake. The CEA warns that premiums may go up following a seismic event.
