Earthquake Insurance California

The California Earthquake Authority (CEA) offers Earthquake insurance for most of California.  However, you don’t purchase it directly from the CEA, but through your insurance provider that is a member of the CEA.  They offer policies for mobile homeowners, homeowners, condo units, and renters.  In order to qualify for earthquake insurance, you must have a proper homeowner’s insurance policy in place.  

Earthquakes are a fact of life here in California.  We know that it will happen, typically it is just a matter of when.  If you live in an earthquake-prone area you should invest in earthquake insurance as well.  This isn’t simply a recommendation but it is required in order to get earthquake insurance.  Many homeowners are not aware that insurance does not cover natural disasters.  Things such as floods, earthquakes, and landslides aren’t always covered in standard policies.  The content of your home is not covered either.  You will need a separate policy for this as an earthquake could be life-altering.

However, your homeowners will cover fire that occurs because of an Earthquake.  Yes, we understand that this can be very confusing but it is important to understand your current policy, front to back.

Earthquake insurance is not mandatory.

If you are a homeowner, your insurance company has to offer earthquake insurance but they aren’t required to push it nor are you required to purchase it. Your insurance company will provide you with the policy in writing on what it will and will not cover.  Once you have their offer, you have 30 days to accept their offer.  If you don’t respond within 30 days it is noted that you have rejected their offer and do not what to carry earthquake insurance.

Earthquake insurance doesn’t cover everything that you have lost in a tremor.  The goal of the insurance is to simply get a roof back over your head. If your home is damaged you will have to live somewhere else whilst it is repaired.  This means that you will have rent to pay along with your mortgage and the expenses of your repairs.  This can be well over what you can afford.  However, not all insurance policies offer to cover rent.

It is important that you read your insurance companies offer to fully understand what is covered and what is not. Taking your time to look over your new policy will save you hassle down the line and in the event of an issue. This will also allow you to fully prepare should something happen in the future.  If you rent, you can get earthquake insurance that will cover where you have to live while your rented place is repaired as well as cover your personal belongings. 

Different dwellings have different issues.

If you are in a condo association, you should speak with them on what dues they would charge should the area be hit by an earthquake.  However, you would want insurance that would cover your personal belongings as well as insurance that would cover your association fees and rent for somewhere to live while it is being repaired.  All other homes and situations, you simply need to have coverage for your personal belongings and rent should you need to leave for the repairs.  

There are different deductibles that aren’t actually charged to you but simply deducted from your checking amount.  The coverage should be equal to that which you have on your homeowners policy.   Keep in mind that most earthquake insurance will not cover pools, fences, landscaping, or separate buildings.  It simply is meant to get a safe roof back over your head.

The average cost of insurance in the state of California is approx. $800 a year.   It is not required but certainly should be considered, especially for those living in the San Francisco area.