California Earthquake Insurance: What You Need to Know

WRITTEN BY: Mark Romero


Despite California holding a reputation as the earthquake capital of the United States, only about 10% of its residents have earthquake insurance. This leaves about 90% of Californians underprepared for the financial losses associated with earthquakes. If you’re in the state and near a major fault line, here’s what you need to know about California earthquake insurance.

What is California Earthquake Insurance?

The California Earthquake Authority (CEA) provides most California earthquake insurance.

You must have a homeowner’s insurance policy to get a CEA earthquake insurance policy. You also have to buy your CEA policy from the same insurance company that holds your residential policy.

What does it cover?

The CEA offers three main parts of basic earthquake coverage:

  • Part 1: Your dwelling coverage. This is also referred to as Coverage A and covers your home up to a limit. This limit will be the same limit on your homeowner’s insurance, with deductibles of 5%, 10%, 15%, 20%, and 25%.
  •  Part 2: Your personal property coverage. This is sometimes called Coverage C and covers things in your home, like computers, furniture, and some electronics. The limit starts at $5,000 and goes up to $200,000. Optional breakables coverage insures china and crystal.
  • Part 3: Loss of use or additional living expenses (ALE). This is also called Coverage D and covers temporary and extra costs while you’re evacuated or your home is being repaired. The limit ranges from $1,500 to $100,000 with no deductible.

Is all earthquake damage covered?

No. There are limits on what earthquake insurance will pay. The purpose of earthquake coverage is to help get you back in your home. It does not replace everything.

CEA insurance does not cover pools, fences, landscaping, pools, masonry, or separate buildings.

Is it included in your home insurance policy?

Homeowner’s insurance policies don’t completely cover earthquake damage. If you have California homeowner’s insurance, your company must offer to sell you earthquake insurance every year.

The offer must be in writing and tell you the coverage amounts, the deductible, and the premium. You have 30 days to accept the offer; if you don’t respond, it counts as a rejected offer.

Who Is The California Earthquake Authority (CEA)?

The California Earthquake Authority (CEA) offers policies for homeowners, condo unit owners, mobile homeowners, and renters. But, you cannot buy it from CEA, only from your homeowners insurance company (as long as they’re CEA members.)

How does the CEA work?

The CEA works to fill an insurance void in the state. California law mandates that homeowner’s insurance companies must offer earthquake coverage. But under this same law, these insurers have excluded earthquake damage for over 30 years. So, for proper coverage, you need a separate policy.

25 residential insurers are CEA members. If your company doesn’t participate in CEA, you won’t be able to buy earthquake coverage from them. Instead, you will need to buy coverage from another company that offers earthquake coverage.

What does CEA earthquake insurance cover?

California Earthquake Authority covers:

  • Damage to your home, up to the same amount as your homeowners policy, excluding fences, pools, and landscaping.
  • Personal items, from $5,000 to $200,000. This includes clothes, toys, computers, furniture, and TVs.
  • Additional living expenses from $1,500 to $100,000 to cover the temporary cost of living.

The CEA’s Homeowners Choice policy also allows you to purchase separate coverage options instead of basic bundles.

What doesn’t CEA earthquake insurance cover?

CEA earthquake insurance covers many scenarios, but it will not cover fire damage, water damage, damage to land, or vehicle damage.

How Much Is California Earthquake Insurance, and Do You Need It?

Like homeowner’s and auto insurance, California earthquake coverage premiums can vary. However, earthquake insurance is recommended if you live near a fault line.

How much does it cost?

In California, earthquake insurance costs an average of $3.54 per thousand dollars of coverage. This translates into an annual premium of $1,770 for a home with a $500,000 replacement cost.

Is it worth it?

The U.S. Geological Survey (USGS) recommends considering the following factors:

  • Your proximity to active faults and the frequency of earthquakes in your area
  • How much time has passed since the last earthquake
  • Your home’s construction type, layout, materials used, and quality
  • The type of land your home sits on, including the slope of the land and type of soil
  • The amount of annual rainfall
  • The value of your home and its contents and the cost to insure the home

Do you need both home insurance and CEA earthquake insurance?

Homeowners, renters, and condominium insurance policies don’t cover earthquake, landslide, and flood damage. So, you should consider getting separate earthquake coverage if you live near a fault line.

California Earthquake Insurance FAQs

Do you really need earthquake insurance?

Earthquakes in California happen without warning. Sometimes, they cause major damage to your home and belongings. If this happens, you might need to move while your home is being repaired or rebuilt. Consider adding more earthquake coverage if you live near a fault line.

What happens if you have no earthquake insurance?

If you do not have earthquake coverage, you’ll most likely pay out of pocket for any repairs related to any damage caused.

Is earthquake insurance tax deductible?

If the earthquake coverage applies to personal home usage, none of those premiums can be written off. But, if you work from home or rent out your home, you may be able to claim a standard or itemized deduction on your return.

Does it make sense in California to have earthquake insurance?

As of July 4, 2022, there have been 9,036 earthquakes in California in the past 365 days per Earthquake Tracker. To determine if you should get earthquake coverage, consider your proximity to fault lines and the overall risk for your area.

What percent of Californians have earthquake insurance?

According to FEMA, only 10% of California’s residents have earthquake insurance, despite experiencing 90% of the country’s earthquakes.

How To Get California Earthquake Insurance

To determine if purchasing a policy makes financial sense, shop for homeowners insurance rates in your area, whether those companies are CEA members and their premium costs. Whether you buy earthquake insurance or not, it’s important to check your level of risk to make an informed decision.