Earthquake Insurance

October 15, 2022

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before you buy earthquake insurance
basic earthquake insurance
what earthquake insurance does not cover
earthquake reinforcement
how to file an earthquake damage claim
should I buy earthquake insurance?
common terms
for more information
talk to the insurance department

earthquakes are a reality in california

Earthquakes will happen, but we don’t know exactly when. we know they can cause a lot of damage to your home and belongings. you may even have to move out of your home while it’s being repaired or rebuilt.

Maybe you are interested

Reading: How to get earthquake insurance in california

Homeowners, renters, and condo insurance policies do not cover damage caused by natural disasters such as earthquakes, floods, and mudslides.

earthquake insurance can help pay for some of your losses. This brochure will tell you about earthquake insurance.

earthquake insurance covers some of the loss and damage earthquakes can cause to your home, belongings, and other buildings on your property.

If you have a mortgage, you must have homeowners insurance. but you don’t have to buy earthquake insurance.

Your homeowners insurance does not cover earthquake damage (except fire; see page 7).

I have home insurance. How can I get earthquake insurance?

If you have homeowners insurance in California, your company must offer to sell you earthquake insurance. must offer this every two years.

the offer must be made in writing. must tell you the amounts it covers (the limits), the deductible, and the premium.
You have 30 days to accept the offer. the 30-day period begins on the date the company mails you the offer. if you don’t respond, you’re rejecting the offer.

does earthquake insurance cover all damage caused by earthquakes?

not. there are limits on what earthquake insurance pays. the purpose of earthquake insurance is to help put a roof over your head. it doesn’t replace everything you lost.

what if I rent?

You can purchase earthquake insurance to cover damage to your belongings and to pay for living elsewhere while your rental home is repaired.

what if I have a condo?

You can purchase earthquake insurance to cover damage to your belongings. You can also pay to live somewhere else while your condo is being repaired. You may also need insurance to help pay for the condo association’s assessment to repair your building. talk to your condo association.

what if I have a mobile home?

You can purchase earthquake insurance to cover damage to your home and belongings. You can also pay to live somewhere else while your mobile home is being repaired.

california earthquake authority (cea)

The California Earthquake Authority (CEA) provides the majority of earthquake insurance in California. cea offers earthquake policies for homeowners, mobile home owners, condo unit owners and renters. You can’t buy earthquake insurance directly from cea, you buy it directly from insurance companies that are members of cea.

You must have a current residential property insurance policy to obtain a cea earthquake policy. you must buy your cea policy from the same insurance company with which you have your residential policy; See the list of participating cea insurers here.

Visit the cea website at www2.earthquakeauthority.com for more information.

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the (3) main parts of basic earthquake coverage offered by the california earthquake authority (cea).

part 1: your homeowners coverage. this is sometimes called coverage a, and it covers your home up to a certain amount, called a limit.

Your earthquake insurance limit is the same as your homeowners insurance limit (dwelling coverage).
cea offers deductibles of 5%, 10%, 15%, 20% and 25%. You do not have to pay your cea deductible up front to receive a claim check, it is simply the amount deducted from your total covered losses.
As with most earthquake policies, cea insurance does not cover gardens, pools, fences, masonry or separate buildings.
exterior masonry siding is not covered unless you add that coverage to your cea policy.
if you rent from someone else or own a condo, you do not need this coverage.
If you rent from someone else or own a condo, you do not need this coverage.

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Part 2: Your Personal Property Coverage. This is sometimes called c coverage, and it covers things in your home, like furniture, televisions, and computers.

limit starts at $5,000 and can increase limit to $200,000.
items like china and glass are covered if you purchase optional breakage coverage.

part 3: additional living expenses (ale) or loss of use. This is sometimes called Coverage D and covers the temporary and additional costs of living elsewhere while your area is evacuated or your home is repaired.

can cover the temporary rental of a house, apartment or hotel room; restaurant meals; a temporary phone line; moving and storage; furniture rental; and laundry.
is subject to a reasonable time needed to repair the dwelling or for you to move to another permanent dwelling.
the limit ranges between $1,500 and $100,000.
this coverage never has a deductible under cea

owner election policies

Cea’s homeowners’ choice policy offers the option of choosing separate coverage for homes and personal property, with different deductibles. although you can select separate deductibles for home and personal property, the homeowners choice policy will not apply both deductibles for the same earthquake claim. This means that CEA waives the personal property deductible if the covered damage to your home exceeds the home deductible.

loss assessment for condo unit owners

if you own a condominium unit, your hoa may have insurance for the common areas and the exterior structure of the building; however, it may not cover earthquake damage to those common areas and exterior structures. In addition, your association may require you and other unit owners to share repair costs or pay part of your policy deductible through an appraisal. CEA condominium unit policies provide up to $100,000 for your share of certain assessments if your association imposes an assessment for covered damage caused by an earthquake.

additional coverage

You may be able to purchase building code upgrade coverage (now up to $30,000). cea homeowners policies include the first $1,500 for emergency repairs with no deductible.

independent or monoline policies

These are not cea policies. Some companies offer these policies. They are policies that you can buy without buying home insurance from the same company.

how do earthquake insurance premiums vary?

Your premium depends on many things, including the location of your home, the cost of rebuilding, the type of construction, the coverages selected, and the deductible. With CEA insurance, older homes can qualify for a discount of up to 20 percent if they’ve been properly retrofitted.

All insurance policies have exclusions. These are the things that the policy does not cover. read your policy for your exclusions.

common earthquake insurance exclusions

Common exclusions in earthquake insurance policies include:

fire

Earthquake insurance generally doesn’t cover anything that your homeowners policy already covers. For example, your homeowners policy covers fire damage, even if an earthquake starts the fire. therefore, your earthquake policy does not cover fire damage.

earth

Earthquake insurance generally does not cover damage to your land, such as erosion sinkholes or other hidden openings under your land. you may be able to purchase additional limited coverage to restore or stabilize land.

vehicles

earthquake insurance does not cover damage to your vehicles. check your auto insurance policy to find out if it covers that damage.

flood

Earthquake insurance does not cover damage caused by water from outside your home, such as sewer or drain overflows, floods, or tsunamis. For example, if you live near a lake that floods your home after an earthquake, earthquake insurance will not pay to repair the damage. a flood insurance policy will cover it.

Does my homeowners or renters insurance cover earthquake damage?

In general, your homeowners or renters insurance does not protect your home from earthquake damage, even if the damage is indirect.

the main exception is fire. see below.
In some cases, your homeowners or renters insurance may specifically cover direct losses due to explosion, theft, or glass breakage caused by an earthquake, even if you don’t have earthquake insurance. ask your insurance agent.
Read your homeowners policy and contact your insurance company any time an earthquake damages your property. don’t assume the damage isn’t covered.

home insurance covers fire damage

California law states that both homeowners and renters insurance must cover fire damage caused by or after an earthquake.

This means fire damage is covered whether or not you have earthquake insurance.

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Modernization is making changes to make your home safer and more robust. this can help you save money on insurance and repairs.

The cost of earthquake insurance is based on several factors, such as how the house is made and the type of soil under it. the cost is usually higher for:

old houses.
houses built of brick or masonry.
houses that have more than one story.
houses that are on sandy soil instead of clay or rock.
houses that do not comply with the code.

What if my house is not up to code?

Your insurance company must offer you earthquake insurance, even if your property doesn’t meet current building code and health and safety code rules about bolted foundations and anchoring water heaters. but you may be charged a higher premium and/or deductible.

You can get a discount if you upgrade.

You may be able to lower your premium or deductible by upgrading to make your home safer and stronger. Your insurance company must tell you about these discounts in writing. retrofitting can:

reduce damage from earthquakes.
reduce insurance costs.
Bring your home up to code.

How can I upgrade?

here are some ways to modernize.

For more information on modernization, visit www.earthquakecountry.org/step4/.

bolt your house to the foundation.
brace the chimney.
Secure the water heater to a wall.
Install automatic gas shut-off valves.
Use plywood to strengthen damaged walls. see image below.

building code update coverage

You can purchase additional insurance for $10,000, called building code upgrade coverage. coverage pays only for the building code updates you need to get a rebuilding permit.

If you notice damage or just suspect it, report it to your insurance company as soon as possible:

1. you can report claims by phone.

2. Your insurance company must open a claim when they receive your claim report.

3. If your insurance company refuses to open a claim, call the California Department of Insurance right away.

4. insist that the company assign a claims adjuster to your case. this person is trained to assess damage to your property.

5. Schedule a time as soon as possible for the claims adjuster to come and inspect the damage.

Show the claims adjuster all the damage you found.
make sure they inspect hidden areas of your property, such as basements, cellars, slabs, and raised foundations.

6. if you find more damage after the first inspection, report it and ask the claims adjuster to do another inspection.

Inspection is important.

It can be hard to tell exactly how much earthquake damage you have. some types of damage are hard to find at first. you and the claims inspector need to look closely and carefully. Make sure all damage you can see is included in your claim, as well as any possible hidden damage.

telephone tips

Make notes of every phone call to your insurance company. type:

the name and title of the person you spoke with.
the date and time she called
what they talked about.
what the person said would happen next.

Do not delay in reporting your claim!

An insurance company may deny claims that are not reported within one year. the year begins with a date called start of loss. this is when first:

You

noticed property damage, or ″
should have, had you carefully looked for all possible earthquake damage to your home.

payment of your claims

If your claim is more than your deductible, the insurance company will subtract the deductible from your payment. you don’t need to spend anything before you get paid.

contact the california department of insurance (cdi).

Call cdi now if your insurance company refuses to open a claim. call 1-800-927-4357.
Download the CDI Residential Property Claims Guide at www.insurance.ca.gov or order by phone.

The following questions can help you decide whether or not to purchase earthquake insurance for you and your family.

Can I afford earthquake insurance?

Use the premium calculator at www.earthquakeauthority.com to estimate your premium.

Do I live where earthquakes are common?

You may need to do some research on nearby faults and the type of soil in your area. find fault lines in the usa uu. geological survey website at https://earthquake.usgs.gov.

Do I have a high-risk home?

A home is likely to sustain more damage if it is older, built with brick or masonry, or has more than one story.

Can I afford not to have earthquake insurance?

After a big earthquake, could you repair or rebuild your house? Can you afford to continue paying your mortgage and taxes while you rebuild?

Won’t the government help me after a big earthquake?

maybe. The main form of federal disaster aid is the low-interest loan. You must show that you can repay the loan. Federal Emergency Management Agency (FEMA) grants for emergency home repairs and temporary rental assistance are only for those who don’t qualify for loans.

I can’t afford earthquake insurance. Are there other ways to protect my home?

yes. There are many things you can do to protect your home and reduce damage from earthquakes. Whether you buy earthquake insurance or not, you should do what you can to protect your home, your belongings, and your family.

modify as much as you can. see page 9.
secure breakable items with museum putty.
put latches on china cabinets.
bolt down tall furniture, like bookcases and cabinets, to the studs. on walls.
tie down computers and TVs.
check your local hardware store for latches, putty, computer straps, and other devices to help protect your belongings.
For more tips on protecting your home, visit www.earthquakeauthority.com and www.earthquakebracebolt.com.

don’t wait until after the earthquake.

waiting until after an earthquake to buy insurance is not a good idea. it doesn’t protect you from damage you’ve already taken. Also, after an earthquake, insurance companies often do not sell earthquake coverage for a set period. and when they start selling it again, the premiums may be higher.

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Additional Living Expenses (ALE): Your additional costs when you have to live somewhere else while your area is evacuated or your home is repaired.

agent: a person an insurance company pays to sell your insurance. cdi licensing agents.

broker: a person you pay to find insurance. cdi license brokers.

claim: your request to your insurance company to cover specific losses or damages.

claims adjuster: a person who works for your insurance company and is trained to examine your home for damage and loss and to estimate costs.

deductible: the part of the insured damages that you pay, before your insurance pays anything. see pages 4 and 5.

Home Limit: The most your insurance will pay (minus the deductible) to repair or rebuild your home.

premium: The annual cost of purchasing earthquake insurance.

Remodeling: Changing your home to make it stronger and safer in the event of an earthquake. see pages 8 and 9.

california earthquake authority

www.earthquakeauthority.com

• Learn more about earthquake insurance.

• calculate your premium.

• print free earthquake preparedness manuals.

earthquake country

www.earthquakecountry.org

• Find information on reconditioning.

• Learn how to prevent injuries and make a disaster plan.

• Learn about fault line hazards and soil types.

national flood insurance program

www.floodsmart.gov

• Find information on how to buy flood insurance.

seismic safety commission

www.seismic.ca.gov

• Learn about earthquake safety in California.

united states geological survey

https://earthquake.usgs.gov

• look for fault lines.

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We are the state agency that regulates the insurance industry. we also work to protect the rights of insurance consumers.

contact the california department of insurance (cdi):

if you think an insurance agent, broker, or company has treated you unfairly.
if you have insurance questions or concerns.
if you want to request cdi brochures.
if you want to file a request for assistance against your agent, broker or insurance company.
if you are having difficulty filing a claim with your insurance company.
to verify the license of an insurance agent, broker, or company.

call:

Consumer Hotline 1-800-927-4357

phone 1-800-482-4833

8:00 am to 5:00 pm, Monday through Friday, except holidays

Visit us on the web at:

www.insurance.ca.gov

write:

california department of insurance 300 south spring st., south tower, los angeles, ca 90013

Visit us in person:

300 south spring st., south tower, ninth floor, los angeles, ca 90013

8:00 am to 5:00 pm, Monday through Friday, except holidays

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