Despite the frequency of earthquakes in California, only 13% of California homeowners have earthquake insurance. [1] Homeowners insurance does not cover earthquakes — so you’d be stuck paying out of pocket if an earthquake destroys your home.
That said, homeowners insurance companies in California are required to offer separate earthquake insurance when you purchase a homeowners policy. Many California insurers sell earthquake policies through the California Earthquake Authority (CEA), a nonprofit that administers earthquake insurance to carriers. But there are other options available, too.
How to get earthquake insurance in California
Earthquakes in California result in millions of dollars worth of property damage every year, damage that can be costly to repair and can make your home unlivable. [2]
There are multiple ways for California homeowners to purchase earthquake insurance:
Through an insurance company participating in the CEA
Through a specialty carrier
By adding an earthquake endorsement to a homeowners policy
Through a homeowners insurer that sells non-CEA earthquake insurance
How you purchase earthquake insurance is up to you, but the CEA insures the most homes in California, and specialty carriers tend to be more expensive than CEA-administered policies.
→ Check out the best home insurance companies in California
What is the California Earthquake Authority?
The California Earthquake Authority (CEA) is a nonprofit organization that sells earthquake insurance policies through participating insurance companies. The CEA underwrites most of the earthquake insurance policies in California, protecting more than 1 million policyholders.
You don’t buy earthquake insurance from the CEA. Instead, you buy it directly from insurance companies that are members of the CEA, meaning you’d buy earthquake insurance from your homeowners insurance company and it’d be administered by the CEA.
What does CEA earthquake insurance cover?
The CEA offers standard earthquake insurance coverage, but with more flexibility in deductible and policy options. The CEA offers two different types of policies:
Homeowners insurance choice policy
Standard homeowners policy
Below are the differences in coverage, limits, and deductible requirements between the two policies.
Coverages | Standard homeowners policy | Homeowners choice policy | What does it cover? |
|---|---|---|---|
Included. Same coverage limits as your homeowners policy. Deductible required. | Included. Same coverage limits as your homeowners policy. Deductible required. | Protects the structure of your home from quake damage. Also covers structures attached to your home, such as an attached garage. | |
Included with a limit of $200,000. Deductible included with dwelling coverage deductible. | Optional coverage with a limit of $200,000. Separate deductible from dwelling. | Covers your personal belongings. | |
Included up to $100,000. No deductible. | Optional coverage of up to $100,000. No deductible. | Pays for additional living expenses if you temporarily need to live elsewhere while your home is repaired. | |
Building code upgrade | Included up to $10,000. Option to increase the limit up to $30,000. Paid after dwelling deductible is met. | Included up to $10,000. Option to increase the limit up to $30,000. Paid after dwelling deductible is met. | Covers mandatory repairs required by local building codes. |
Emergency repairs | Included up to 5% of dwelling and 5% of personal property limit. First $1,500 is not subject to a deductible. | Included up to 5% of dwelling and 5% of personal property limit. First $1,500 is not subject to a deductible. | Covers emergency, immediate repairs needed in order to prevent further damage. |
Both policies also offer two additional optional coverages:
Breakables coverage: Protects glassware and fine china
Exterior masonry veneer coverage: Protects nonstructural elements of your home, like brickwork or tile
How do earthquake insurance deductibles work?
A deductible is the amount you need to pay out of pocket after a loss before your insurer kicks in the rest. Earthquake insurance deductibles are different from homeowners insurance deductibles, which are typically a flat dollar amount. Instead, earthquake deductibles are a percentage of the coverage limit.
Here’s an example.
If you have $10,000 in earthquake personal property coverage and your deductible is 10%, you’d have to pay a $1,000 deductible before your insurer kicks in the remaining $9,000.
You choose your deductible when you purchase your policy. CEA earthquake deductibles are 5% to 25% of the coverage limit. CEA does not require you to pay out of pocket for your deductible, instead it is subtracted from your claims settlement check.
Earthquake insurance companies in California
Below are homeowners insurance companies that currently participate in the CEA. [3]
AAA
Armed Forces Insurance Exchange
California FAIR Plan
Commerce West
Hyundai Marine & Fire Insurance
MAPFRE
To learn about other residential insurance companies that participate in the CEA, like renters and condo insurers, visit the CEA website.
How much does earthquake insurance cost in California?
The average cost of earthquake insurance is about $850 per year, according to policy data from AAA. [4] However, how much you pay for earthquake insurance depends on a variety of factors, including your insurance company and coverage amount.
Other factors that determine your earthquake insurance rates:
The size of your home
Location of your home (if you live close to a fault line your rates will be higher)
Your home’s foundation (slab or concrete)
The age of your home
Your home’s construction (frame or masonry)
Add-on coverages
Discounts (the CEA offers up to 25% off your premium if your home was seismically retrofitted to better withstand earthquakes)
The CEA has a useful earthquake premium calculator on its website to give you an estimate of how much your premiums might cost if you purchase a CEA-administered policy.
Other ways to buy earthquake insurance in California
Not all homeowners insurance companies are members of the CEA. Below are three other options for buying earthquake coverage.
1. Specialty carriers in California
Specialty carriers sell insurance policies that can protect your home from special circumstances that are not typically covered by a standard homeowners policy. Three specialty carriers in California that sell standalone earthquake insurance policies include:
GeoVera
Arrowhead
Pacific Specialty
2. Non-CEA earthquake insurance companies
Insurance companies may sell their own earthquake insurance. Over 30 residential insurance companies offer their own earthquake insurance, according to the California Department of Insurance. [5] Coverage and costs will vary by company. And non-CEA earthquake deductibles are typically set at 10% to 20% of your coverage limit, according to the NAIC. [6]
3. Earthquake homeowners insurance endorsement
Depending on your insurer, you may be able to add an earthquake endorsement to your standard homeowners insurance policy. An earthquake endorsement will add coverage for quake damage to your policy. While coverage won’t be as comprehensive as with an actual earthquake insurance policy, it will likely be cheaper.
Frequently asked questions
Is earthquake insurance required in California?
No, there is no law in California that requires you to purchase earthquake insurance. Home insurance companies are required to offer it when you purchase a homeowners policy or renew one, but you can choose to forgo earthquake coverage.
Is the CEA the only earthquake insurance in California?
No, there are insurance companies that sell standalone earthquake insurance policies, specialty carriers, and some insurers allow you to add earthquake coverage to your standard homeowners policy.
Why are earthquake deductibles so high?
Earthquake insurance deductibles are much higher than a standard homeowners insurance deductible because earthquakes tend to cause a catastrophic amount of damage. A higher deductible means you’re unable to file a claim for more minor quake damage.
