Do you need earthquake insurance in California? There is no doubt about the fact that earthquakes can be extremely devastating and cause serious harm.
When you live in California, you must be more serious about protecting your property and life, as the state is prone to earthquakes.
Now, getting insured is a great idea, but many people ask, “Is earthquake insurance worth it in California?” Do you really need it?
You are not required by law to buy earthquake insurance in California but considering the vulnerability of California to earthquakes, you should consider getting one. Â
What Is Earthquake Insurance?
Earthquake insurance protects your residence and personal possessions in the event of an earthquake, ensuring that any damage or loss incurred is covered.
You usually do not get earthquake insurance with your standard homeowner’s insurance.
Without earthquake insurance, you will be responsible for covering the costs of repairing any damage to your home.
An Important Exception to the Rule
There is one exception, and that is if an earthquake ignites a fire that engulfs your home.
In this case, your home insurance should take care of the fire damage as it specifically covers such incidents.
Typically, this also encompasses coverage for additional living expenses, which will provide reimbursement for alternative accommodations during the repair of your home.
How Serious is the Issue of Earthquakes?
According to the latest findings from the United States Geological Survey, nearly half of the American population faces potential harm from earthquakes.
Regrettably, insurance policies for homeowners, condo owners, and renters often exclude coverage for damage resulting from earthquakes.
If you want to protect yourself against earthquake damage, you can buy an earthquake insurance policy.
Why People Avoid Earthquake Insurance?
Earthquakes are an inevitable occurrence, although their timing remains uncertain. It is no secret that they can wreak havoc on your home and personal belongings.
You might even need to temporarily relocate from your residence during the process of repairing or rebuilding it.
But, most people ignore it because they think there won’t be an earthquake powerful enough to cause serious harm.
Fact: Insurance policies for homeowners, renters, and condominiums exclude coverage for damages caused by natural disasters like earthquakes, floods, and landslides.
Do You Really Need Earthquake Insurance?
Although mortgage lenders or HOA associations do not usually mandate earthquake insurance, it is worth contemplating if you reside in an area prone to earthquakes.
The Modified Mercalli Intensity Scale is employed to assess the magnitude of an earthquake.
Here is what they found about the top 10 states with a strong shaking potential:
| No | States |
| 10 | Illinois |
| 9 | Missouri |
| 8 | Arkansas |
| 7 | Nevada |
| 6 | South Carolina |
| 5 | Oregon |
| 4 | Tennessee |
| 3 | Utah |
| 2 | Washington |
| 1 | California |
Fact: It is not a good idea to dismiss the possibility of an earthquake, even if you do not reside in one of these top-10 states with the greatest shaking potential.
Do You Need Earthquake Insurance in California?
By law, you do not need earthquake insurance in California.
Many people also ask, “Do you need earthquake insurance for renting in California?” And the answer is no.
It is actually quite counterintuitive considering California has more than 16,000 earthquake faults.
It means there is a high probability of witnessing a powerful earthquake in the near future.
So, while you do not require an insurance policy by law, you should still seriously think of buying one in California.
More about Getting Insured in California
The majority of earthquake insurance in California is provided by the California Earthquake Authority (CEA).
CEA does not offer earthquake insurance directly; instead, you can purchase it from insurance companies affiliated with CEA.
In order to obtain a CEA earthquake policy, it is necessary to have an active residential property insurance policy.
Percentage of Households with Earthquake Insurance
While the risks of getting affected by earthquakes are quite high in California, most people still decide not to buy an insurance policy.
Here is a bit more about it:
| Region | Earthquake Insurance % |
| Midwest | 16 |
| Northeast | 21 |
| South | 25 |
| West | 28 |
Fact: Even though California bears the brunt of 90% of the nation's earthquakes, a mere 10% of its residents have taken the precaution of securing earthquake insurance.
Is It a Good Idea to Get Residential Earthquake Insurance in California?
For numerous homeowners in California, their home represents their most significant financial asset.
Therefore, it makes great sense to protect yourself from financially devastating earthquakes with CEA home insurance.
Earthquakes are truly unique among all natural disasters. There are no signs of warning or prior notice.
There is no doubt about it: California, with its extensive network of nearly 16,000 known faults, is at risk of experiencing a catastrophic earthquake in the coming years.
In California, earthquake insurance is not mandatory, unlike home fire insurance for homeowners. But is it worth it? It truly is.
What If You Ignore Earthquake Insurance in California?
If you decide against buying earthquake insurance, you will bear the full burden of expenses associated with it.
This includes:
- Covering the entire cost of repairing your home
- Replacing your belongings
- Finding alternative accommodation following a significant earthquake
Fact: In 2017, a mere 11.3% of Washington's population had insurance coverage, despite the state boasting the second-largest market in the seismic industry.
Understanding the “Special Limits” of California Earthquake Insurance
Earthquake insurance policies frequently come with specific limits on the amount the insurer will cover for replacing certain items or repairing structures.
For example, you may find a policy that solely permits a maximum of $500 for computer replacement.
But, you may also see another policy covering tree removal up to $1,000 (with a limit of $500 per tree, regardless of the number of trees).
Certain insurance policies may not provide coverage for any potential damage that may occur to a swimming pool or its surrounding deck area.
Therefore, take your time to check your coverage before signing the dotted line.
What California Earthquake Insurance Won’t Cover?
Exclusions are present in every insurance policy.
Here are the items not covered:
Fire
Typically, earthquake insurance does not provide coverage for anything already covered by your homeowner’s policy.
For instance, your homeowners policy provides coverage for fire damage, even in the event that an earthquake is the cause of the fire. Hence, your earthquake policy does not provide coverage for fire damage.
Land
Usually, earthquake insurance does not provide coverage for land damage, such as sinkholes caused by erosion or concealed openings beneath your property.
There is a possibility of purchasing extra coverage to enhance or maintain land conditions.
Vehicles
Vehicle damage is not included in earthquake insurance coverage. Make sure to review your auto insurance policy to determine if it provides coverage for the damage.
Flood
Earthquake insurance does not provide coverage for water damage caused by external sources, such as:
- Drain backup
- Sewer blockage
- Tsunami
If you happen to reside close to a lake that inundates your residence following an earthquake, understand that your regular earthquake policy may not cover you.
You will be covered by a flood insurance policy instead.
Fact: In 2000, a solid 60% of individuals residing in Missouri had insurance coverage. As of 2021, the percentage has dropped to 11.4%.
How to File Your Claim for Earthquake Damage CA?
You have to follow a number of steps to be able to claim any damage caused by an earthquake in California.
For instance:
| Steps | What to Do |
| Step 1 | Report your claim by phone. |
| Step 2 | Ensure that the company opens a claim once they receive your report. |
| Step 3 | Be sure to connect with the CA Department of Insurance if your company refuses to open a claim. |
| Step 4 | Ask for a trained claim adjuster for assessment. |
| Step 5 | Schedule an appointment with the claim adjuster. |
| Step 6 | Be with your claim adjuster and ensure inspection of crawl spaces, basements, and raised foundations. |
| Step 7 | Don’t be shy to ask for another inspection if you find additional damage after the initial inspection. |
Keep in mind that the inspection is super important because there might be damage that is not obvious right away.
It is necessary to carefully examine everything to make sure all damages are documented in the claim, even if they are hidden.
Takeaway
Do you need earthquake insurance in California? The truth is that earthquake insurance is not mandatory in California, but you should still not ignore its importance.
With thousands of known faults in California, you never know when you might get hit with a big earthquake.
It is better to be safe and ask your homeowners insurance provider to share your options for earthquake insurance in California to be on the safer side.
