California earthquake insurance: cost and considerations

Do I need earthquake insurance in California?

California residents are often told to prepare for “the big one.” There is currently over a 99 percent chance that an earthquake of magnitude 6.7 or higher will strike California. While this figure seems high, it’s not so surprising when you consider the geology of the state. There are over 15,000 known faults in California, and more than 500 of them are active. Most residents live within 30 miles of an active fault. When it comes to earthquakes, being prepared may make a big difference in terms of your family’s safety and financial protection.

One proactive method for financial protection could be to obtain earthquake insurance. While earthquake insurance is not mandatory in California, damage from earthquakes is excluded from standard home insurance policies. For this reason, if your home or personal belongings were damaged by an earthquake, and you didn’t have designated earthquake insurance, you’d be responsible for the cost of repairing your home or replacing damaged belongings out of pocket.

Some earthquake insurance policies extend coverage to other structures like a pool, shed or fence. Earthquake insurance may also cover the cost of temporary living arrangements after a covered quake through loss of use coverage or additional living expenses.

What is the best earthquake insurance in California?

When it comes to obtaining California earthquake insurance, there may be a few different methods available. Here are two of the most common ways California residents typically obtain earthquake insurance.

The California Earthquake Authority

The California Earthquake Authority (CEA) is one of the biggest residential earthquake coverage providers. It is a not-for-profit organization, and its premiums reflect the latest science around earthquake risk in California. A CEA insurance policy offers the following coverage options:

• Dwelling
• Personal property
• Loss of use
• Building code upgrades
• Emergency repairs

Breakables and exterior masonry veneer coverage are no longer available for policies written on or after August 1, 2023, and renewals on or after November 1, 2023.

The California Earthquake Authority offers two different levels of coverage: Standard Homeowners and Homeowners Choice.

Earthquake coverage through private insurers

The other option for buying earthquake insurance in California is to purchase a standalone policy through a private insurance company. A few private California earthquake insurers include GeoVera, Arrowhead and Jumpstart. When shopping for earthquake insurance policies, be sure to read through each company’s coverage and limitations carefully to ensure you know how you’ll be covered and what your deductibles are in the event of an earthquake.

How to purchase earthquake insurance in California

Over 20 property insurance companies currently sell CEA coverage. Keep in mind that CEA does not offer standalone policies. In order to qualify for CEA insurance, you must have a homeowners insurance policy with one of the participating insurance companies.

However, all home insurance companies in California are required by law to offer earthquake insurance, either through a private provider or the CEA. The most straightforward way to purchase one is to speak with a licensed representative from your home insurance company.

California Earthquake Authority deductibles

Earthquake deductibles from the California Earthquake Authority are offered as percentages of your dwelling limit, as opposed to flat dollar amounts. Homeowners can choose between a 5, 10, 15, 20 and 25 percent deductible. For policies written on or after August 1, 2023, and renewals issued on or after November 1, 2023, homes with a dwelling limit over $1,000,000 or homes built before 1980 on a raised foundation or other foundation that is not retrofit to certain specifications, deductible choices are limited to 15, 20 and 25 percent.

If a home were to sustain $300,000 in damage and the homeowner had a 5 percent deductible, that could mean paying $15,000 out of pocket. Other deductible selections would mean paying even more. While no small sum, earthquake policies are meant to transfer the bulk of a homeowner’s financial risk to insurers in the event of significant damage resulting from a quake.

To see what real Californians had to say about whether or not earthquake insurance is worth it, Bankrate reviewed comments from Reddit. Here’s what we found:

“I have it, and it costs me ~$30/month because I have a low deductible. For me, it is worth having the peace of mind for essentially one takeout meal a month nowadays.” – Reddit User 1*

“I haven’t seen anyone else mention this and I don’t know 100% if it’s true (so someone please correct me if I’m wrong)… I have heard that earthquake insurance is a waste because if there was a large enough quake that it was worth paying your deductible, most of San Diego would be catastrophically damaged and be declared a disaster zone. In this case, you could apply for fema aid which would be cheaper than paying your deductible.” – Reddit User 2*

*The quotes and citations included on this page have been verified by our editorial team and are accurate as of the posting date. Outlinked content may contain views and opinions that do not reflect the views and opinions of Bankrate.

How much does earthquake insurance cost?

The price of earthquake insurance may be different for every homeowner. When calculating earthquake insurance costs, there are a few factors you might want to consider. Your earthquake insurance premium may be dependent on the following factors:

• The age of your home
• The materials your home is built with
• The type of foundation
• The home’s proximity to a fault line
• Reconstruction costs
• Coverage types
• Deductible amount

If you own an older home retrofitted to withstand earthquake damage, you could qualify for a discount on your CEA insurance. California homeowners may be eligible for a lower premium if their home meets the following criteria:

• Was built before 1980
• Is constructed with wood frames
• Is built on a raised foundation or other non-slab foundation
• Is seismically retrofitted based on California standards

To get a sense of what you will pay for coverage, you can use the CEA’s earthquake insurance premium calculator. Unlike traditional home insurance, earthquake insurance rates are generally based on the home itself, rather than the homeowner. Generally speaking, the more risk your home faces, the higher your premium may be.

How to prepare your home for an earthquake

Preparing your home for an earthquake may reduce the chances of damage to your home and belongings as well as better protect the safety of you and your family. Some steps you may want to take to prepare for a potential earthquake include:

• Secure heavy items: This includes furniture, appliances, electronics, hanging objects and even ceiling fans. Keep tall and heavy objects away from areas where you normally spend time, like your living room couch or dining room table. Avoid hanging anything heavy on the wall behind your bed’s headboard, including framed photos.
• Store breakable objects low: If you have breakable objects, like glassware, consider storing them in low or closed cabinets with latches. Also, keep heavy objects low to reduce the risk of injury from falling objects.
• Identify safe spaces and make a plan for shelter: Identify spaces where you and your family could take cover during an earthquake. The spaces should be away from windows, mirrors or other heavy objects that could break or fall. If possible, seek shelter under sturdy furniture, like a table or desk. Practicing at-home earthquake drills with your family may help you stay calm during a real quake. While your instinct may be to run outside, this can often lead to injury due to falling objects and an unsteady structure, so it’s often better to remain inside.
• Inspect your home: You might consider having your home inspected by a professional to assess its earthquake readiness. They might suggest improvements like reinforcing chimneys, retrofitting the foundation or adding seismic safety measures to an older house.
• Have an earthquake kit: In the event of a serious earthquake, your home could lose power. Likewise, neighborhood stores could be out of operation. It’s smart to keep a disaster kit handy that will help you survive for a few days if necessary. The kit should include a radio or other device to receive updates. It should also include non-perishable food and water, necessary medications, a flashlight, extra batteries and a first aid kit.

The steps mentioned here are only basic, general recommendations. The steps necessary for you may vary based on your location, home type and family needs. Local emergency management organizations or national organizations like the American Red Cross or FEMA can provide additional guidance on how to best prepare for a potential disaster.

Frequently asked questions