Skip to the main content

Earthquake Insurance

Why Buy Earthquake Insurance?

When it comes to natural disasters, earthquakes are the scariest and most difficult to prepare for. Unlike floods or hurricanes that may occur with a warning, earthquakes can happen at any time without notice. Preparing yourself and your home in case of a quake is complicated, but one thing you can do right away is getting earthquake insurance. Although there is an additional cost and potential inconvenience of obtaining coverage in an area prone to earthquakes, having this type of insurance can protect your most valued investment - your home - from serious financial losses due to earthquake damage.

Earthquake Insurance Data

The top 2 states in the U.S. prone to earthquakes - California and Washington - highlight how unprepared the country is for a major earthquake, according to the Federal Emergency Management Agency (FEMA).

Even though California experiences about 90% of the nation's earthquakes, only 13% of residents in California had earthquake insurance in 2019.
And just over 11% of Washington residents were insured for earthquake coverage in 2017.

Earthquake Insurance Coverage

Earthquake insurance coverage parts are similar to what your home or property insurance coverage is, although depending on the company and policy, there may be some differences. For example, the California Earthquake Authority (CEA) does not offer Other Structures coverage on earthquake policies.

Dwelling - Often referred to as Coverage A, dwelling covers your home up to the limit of coverage selected.
Other Structures - Coverage includes for detached structures, pools, spas, patios, bbq areas, paved areas, and walkways that are not an entrance or exit to the home.
Personal Property - Or Contents is all the belongings of personal and business property like furniture, clothes, jewelry, electronics, appliances, fine art, ceramics, china, breakables, etc.
Loss of Use - additional living expenses coverage for temporary and extra costs to live elsewhere while your home is being repaired or your area is evacuated.
Loss Assessment - An important coverage for condo unit owners and those who have a responsibility to share in the cost of repairs for the common areas of the HOA.
Building Code Upgrade - Or Ordinance or Law Coverage, pays for additional costs associated with the cost of repairs to your home due to the changes in law and regulations.

Earthquake Insurance Deductible Options

Unlike the common home insurance policy, where the deductible is a fixed amount like $1,000 or $2,500, earthquake insurance policies have a deductible that is a percentage with deductible options from 2.5% to 25%..

Example: A 10% deductible on $500,000 dwelling coverage would be $50,000. The insurance company would pay for repairs to the dwelling for an amount over $50,000. The customer is responsible for the first $50,000 of damage, and the insurance company would pay for the rest.

Standalone Earthquake Insurance

Standalone or monoline earthquake insurance policies are available from private insurance companies. These policies can be purchased without buying the homeowner's insurance policy from the same company also. Standalone earthquake insurance policies not only offer better coverage than the CEA government insurance program, they often also have a lower price than the CEA policies.

earthquake in California — Customize a stand alone earthquake insurance policy with the coverage you want.

Be financially prepared for a major earthquake with an earthquake insurance policy.

CEA Earthquake Insurance

The CEA is a not-for-profit organization that was created by the state of California legislators in 1996. CEA offers insurance coverage for homeowners that will help protect them from some of the financial losses associated with an earthquake. Many residential property insurers in California offer earthquake coverage through the CEA by becoming a CEA participating insurance company. Over 65% of all residential earthquake insurance is written through the CEA, making them the largest residential earthquake provider in California.

Mini Earthquake Policies

In their answer to solving the unavailability of the earthquake insurance problem that was also affecting the housing market, in 1995, the California Legislature created a very basic, no-frills "mini policy" that home insurers could offer the public complying with the mandatory offer law. The mini policy provides homeowners the basic coverage that does not include coverage for pools, patios, or much of personal property and loss of use.

How To Buy Earthquake Insurance

Buying standalone earthquake insurance is the best way to make sure your property is properly covered for damages resulting from an earthquake. It's generally recommended to purchase standalone earthquake policies due to the fact that these policies are more detailed than the coverage typically provided in homeowners' and renters' insurance providers. California homeowners should particularly note that they can purchase earthquake insurance policies through the CEA, a publicly-managed organization founded with state funds. As each standalone policy carries different terms and conditions, it's important to ask your agent any questions you may have regarding cost, deductibles and premium payments when making this important decision.

earthquake magnitude scale — Homeowner insurance policies generally do not include earthquake coverage.

Buying earthquake insurance policy is easy.

There are several points to consider when buying earthquake insurance. How much deductible? Do you want basic or more comprehensive coverage? Should you pick a Private or Government Program?

Calico has several types of earthquake insurance policies from the many private insurance providers, as well as the state managed program CEA. And Calico's licensed agents are trained professionals in earthquake insurance, and we can help by guiding you in making the correct selection based on your personal needs and wants.