California Earthquake Insurance

Earthquake Insurance Is Important in California

It should come as no surprise that California is the most seismically active state in the country. In fact, this state experiences 10,000 earthquakes every year, although most are of such a low magnitude that they are barely felt if at all. Unfortunately for property owners in California, some quakes are of a far more violent nature, which can sometimes lead to expensive property damage. Unless you have a separate earthquake insurance policy to supplement you home, condo, renters or business insurance, you will not have coverage for these losses. The first step to acquiring this coverage is to request and compare earthquake insurance quotes in California.

California Earthquake Facts

  • Of all single-event natural disasters faced by California residents, earthquakes pose the highest risk.
  • There are more than 100 active faults located throughout this state.
  • The most powerful earthquake in CA was the 1857 Fort Tejon Earthquake, which affected a 225-mile area. This 7.9 magnitude quake originated in the San Andreas Fault and damaged property from Parkfield to Wrightwood.
  • The most destructive earthquake in CA was the 1906 San Francisco Earthquake, which affected a 296-mile area. This 7.8 magnitude quake originated in the San Andreas Fault and damaged property from San Juan Bautista to Cape Mendocino.
  • Recent major earthquakes include the 6.9 magnitude Loma Prieta Earthquake that affected the San Francisco area in 1989 and the 6.7 magnitude Northridge earthquake that damaged property in the Los Angeles area in 1994.

Earthquakes with a magnitude of 6.0 and greater can cause serious damage to homes and businesses. Even less severe quakes with a magnitude of 5.0 can result in cracks in foundations that require expensive repairs. It is, therefore, extremely important that California’s residents carry earthquake insurance.

Why Are Residents of California at Risk?

A fault is a thin zone of crushed rock that separates blocks of the earth’s crust. When an earthquake occurs on a fault, the blocks the sides of the fault can move or shift. While the San Andreas Fault is the most widely known fault in California, there are actually about 100 faults beneath this large state. The San Andreas Fault is the tectonic boundary between the North American Plate and the Pacific Plate, running 810 miles through the state of California. Because of this large and active fault zone, the entire state is at risk for earthquake damage.

How To Get Earthquake Insurance

Despite the risks faced by residents of this state, only about 12 percent of Californians have earthquake insurance coverage. In some cases, it is because homeowners and renters mistakenly believe that they have coverage against this damage through their home or renters insurance policies. Unfortunately, as many learn too late, this is not the case.

Home insurance does not include earthquake coverage. Some companies do offer their policyholders the option to buy earthquake coverage to supplement their policies, while others do not offer this coverage at all, necessitating customers to find a policy through another company.

Regardless of how you get this coverage, it is important that you have it. Do not be fooled into believing that, if you are the victim of a disaster, FEMA will cover yours costs. FEMA may step in to provide assistance, but this comes only in the form of guaranteed low interest loans that you must repay. If this loan includes the cost of a new house, you could be repaying it for the rest of your life.

To best protect your investment and finances, it is important that you have a suitable earthquake insurance policy.

What Does Earthquake Insurance Cover?

Earthquake insurance compensates policyholders for property loss and damage resulting from an earthquake. When you purchase a policy, you will select coverage amounts for three different types of coverage:

  • Structural coverage: This covers damage to the structure of your home. If a high magnitude quake destroys your home, this coverage can provide you with the funds to rebuild a house of comparable value. Keep in mind, however, that this coverage usually has a 10 or 15 percent deductible.
  • Contents coverage: This compensates you for damage to the property you keep inside your home like a china cabinet or expensive electronics. You choose the level of contents coverage you wish to purchase.
  • Loss of use coverage: In a quake leaves you homeless or in need of temporary housing while you rebuild or repair your home, you can use this coverage to compensate you for the associated costs. Again, you will have to choose a level of coverage.

Is Earthquake Insurance Expensive in California?

California has an extremely high earthquake risk. As a result, insurance coverage in this state does not come cheaply. Your earthquake insurance rates will depend on a number of factors, including the following:

  • Where your home or business is located
  • The year that the insured structure was built and its current value
  • The number of floors in the structure
  • The type of foundation the structure sits on (i.e., slab, raised or other)
  • The amount of coverage purchased for structure, contents and loss of use
  • The chosen amount of your deductible

A policy may cost close to $800 a year, but, with so many factors affecting the cost, your actual rate may be significantly higher or lower than this amount. The only way to find out exactly how much an earthquake insurance policy will cost you is to request quotes from insurance companies that provide this coverage in California. You can ensure that you are getting your insurance at a reasonable rate by comparing rates from at least three different providers.

CA Residents Can Compare Earthquake Insurance Quotes

Finding and comparing earthquake insurance quotes to protect your property in California is easy when you enlist the help of one of the many independent insurance agents in the Trusted Choice® network. These agents, familiar with the hazards of particular neighborhoods, can offer you advice about your various policy options and can provide you with a selection of competitively priced policies.

Contact a Trusted Choice agent near you if you would like more information. Your agent can help you to start your review of earthquake insurance quotes in California.

Now, who's ready to get their insurance problems solved?