How Much Does Earthquake Insurance Cost in California?
How Much Does Earthquake Insurance Cost in California?
Find Cheap Homeowners Insurance Quotes in California
California homeowners need earthquake insurance if they want full protection, as damage from earthquakes is not covered by homeowners insurance. Earthquake insurance costs an average of $3.54 per thousand dollars of coverage in California, which translates into an annual premium of $1,770 for a single-family home with a $500,000 replacement cost. However, depending on which insurer you choose, premiums can cost as little as 10 cents per thousand dollars of coverage or as much as $15 per thousand dollars of coverage.
Earthquake insurance rates in California by city
Earthquakes are expected to cause $6.1 billion worth of damage annually in the U.S. Between 2010 and 2015, the U.S. Geological Survey recorded 1,545 earthquakes in the state of California that registered at or above a magnitude 3.
Earthquake premiums vary by location. The closer your house is to a fault line in California, the higher your premium, reflecting the greater probability of earthquake damage and the resulting higher cost to protect your assets.
We analyzed how much it costs to protect your home, with earthquake insurance premiums from 34 insurance providers across 30 cities distributed geographically throughout the Golden State.
Average coverage rate
Average annual cost for $500,000 of coverage
|Big Bear Lake||$3.41||$1,704|
Rates are per thousand dollars of coverage.
Residents in the Los Angeles neighborhoods of Echo Park, Silver Lake and El Sereno tend to see cheaper premiums for earthquake coverage. Residents in Mar Vista, Culver City and West Los Angeles typically pay higher premiums for the same coverage.
With the San Andreas tectonic zone and hundreds of smaller active faults, the county is estimated to have a 60% chance of an earthquake with a magnitude of at least 6.7 in the next three decades, according to the U.S. Geological Survey.
The cost of protection against earthquakes ranges from $2.90 to $3.09 per thousand dollars of coverage in San Diego. For $758,000 of dwelling coverage — the median home price in San Diego — the annual premium is estimated to be between $2,199 and $2,342.
Home to over 1.4 million residents — and the Rose Canyon, Elsinore and San Jacinto fault lines — the city also has a 75% chance of a magnitude 7.0 or greater earthquake in the next 30 years, according to the California Earthquake Authority (CEA). The organization estimates that 45% of residential buildings would be damaged by an earthquake of this magnitude.
Insuring a single-family house in San Francisco against earthquakes could cost anywhere from $4.08 to $4.58 per thousand dollars of coverage. The Mission neighborhood ranks on the cheaper end, while Nob Hill residents tend to see rates on the higher end of the range.
Assuming coverage for a median home price of $1.3 million, rates could be close to $6,000 a year.
With the San Andreas and Hayward faults running through the greater Bay Area, the U.S. Geological Survey estimates that there's a 72% likelihood that an earthquake of at least a 6.7 magnitude will strike in the next 30 years.
How much do earthquake insurance costs vary by insurer?
The average cost by earthquake insurer ranges from 10 cents to $15 per thousand dollars of coverage for a single-family house in California. Estimated annual premiums range from $50 to $7,500 for coverage limits of $500,000, illustrating the importance of comparing quotes.
The graph below ranks companies based on their coverage cost per thousand dollars, starting with the most affordable. The quote you receive may vary based on the characteristics of your house, including its foundation, number of stories and year built. This graph also does not include carriers like Allstate, State Farm or USAA, which refer to the California Earthquake Authority to calculate rates.
The companies with the three lowest earthquake insurance rates are Cincinnati Insurance Co., Privilege Underwriters Exchange and AIG, with average rates ranging from 10 cents to $1.30 per thousand dollars of coverage.
On the other hand, the three companies charging the highest rates are Aegis Security, American Modern and Pacific Specialty. These insurers quoted rates that are 16 to 150 times higher than the rates from the cheapest competitors. For these pricier carriers, rates are fairly consistent and are not greatly affected by whether a homeowner lives in a low-risk or a high-risk area for tremors.
CEA earthquake insurance policies
The California Earthquake Authority (CEA) is one of the world’s largest providers of residential earthquake insurance. A publicly managed not-for-profit entity, it partners with insurers to help Californians manage their earthquake-related risks and losses.
The CEA offers two policies for earthquake insurance: Homeowners Choice and Standard Homeowners. The biggest difference between the two policies is that the Homeowners Choice policy does not automatically include personal property or loss of use coverage. Homeowners Choice policies are usually cheaper, but we generally recommend purchasing the Standard Homeowners policy. Unless you are confident you could replace your personal property and you have a place to stay after an earthquake, paying for loss of use and personal property coverage is worth it.
Included in Standard Homeowners?
Included in Homeowners Choice?
Coverage limits for both policies
|Dwelling coverage||Covers earthquake damage to the structure of your home and attached structures like a garage||Yes||Yes||Matches homeowners insurance policy limits|
|Personal property coverage||Covers earthquake damage to your belongings||Yes||No; optional add-on||Maximum of $200,000|
|Loss of use||Covers the costs of staying elsewhere if an earthquake renders your home uninhabitable||Yes||No; optional add-on||Up to $100,000|
|Building code upgrades||Covers the cost of repairs to ensure they comply with the current building code||Yes||Yes||$10,000 automatically included; maximum of $30,000|
|Emergency repairs||Covers urgent repairs needed to forestall further damage, such as broken windows or glass||Yes||Yes||Maximum is 5% of homeowners and personal property limit|
|Breakables||Covers certain categories of breakables, such as crystal, china and glassware||No; optional add-on||No; optional add-on||None listed|
|Exterior masonry veneer||Covers repairs to certain kinds of exterior masonry, such as brick or stone||No; optional add-on||No; optional add-on||None listed|
Deductibles for earthquake insurance
Your deductible will work slightly differently depending on whether you have a Standard Homeowners policy or a Homeowners Choice policy. If you have a Standard Homeowners policy, your insurance company will only subtract the cost of one deductible — the dwelling coverage deductible — from your claim payment.
By contrast, policyholders with a Homeowners Choice policy have a separate deductible for personal property coverage. However, this personal property deductible is only required if the policyholder does not pay their dwelling coverage deductible. If the earthquake damage is so significant that a policyholder pays their dwelling coverage deductible, both dwelling coverage and personal property coverage kick in.
CEA earthquake insurance for mobile home owners, condo owners and renters
California Earthquake Authority policies are obtained through the CEA’s member insurance companies. Participating insurers include some of California's major homeowners insurance providers, like State Farm, Allstate and USAA.
Frequently asked questions
How much earthquake insurance should I buy?
Earthquake insurance costs are based on the value of your home. You should insure your home based on its replacement cost, which should be listed on your homeowners insurance policy.
What is the deductible on an earthquake insurance policy?
The deductible on an earthquake insurance policy varies by company but is usually between 10% and 20%.
What is the California Earthquake Authority (CEA)?
The California Earthquake Authority (CEA) is one of the largest providers of residential earthquake insurance in the world. The CEA is a publicly managed not-for-profit entity that partners with some of California's top insurers to help residents manage their earthquake-related risks and losses.
Does car insurance cover earthquake damage?
Your auto insurance covers earthquake damage if you have comprehensive coverage, which covers damage to your car that isn't a result of a collision.
Is there earthquake insurance for renters?
There are earthquake policies available for renters. Since renters insurance does not cover earthquake damage, it's recommended that renters purchase a separate policy to protect their personal property and help reimburse costs if their home becomes uninhabitable due to earthquake damage.
Does earthquake insurance cover tsunamis?
Whether the damage from a tsunami is covered by your earthquake insurance depends on the direct cause of the damage. If the tsunami triggers mudslides that damage your home and belongings, your earthquake insurance may cover the damage. However, any damage done by floodwater would require a separate flood insurance policy.
We analyzed sample earthquake premiums submitted by insurance companies to the California Department of Insurance. The sample included 57 companies, and actual rate samples were submitted by 35 carriers. Twenty-two carriers were excluded because they did not provide actual rates and referenced the California Earthquake Authority for rates calculations, or their earthquake insurance was underwritten by another company included in our list. Rates that were substantially higher than the majority of the quotes provided were excluded.
Rates are listed per thousand dollars of coverage. To determine your rate estimate, take the amount of coverage you need, divide it by a thousand and multiply it by the estimated rate. For example, if you need $800,000 of coverage, calculate: $800,000 / $1,000 for $800, multiplied by the study average coverage rate of $3.54, for an estimated $2,832 annual premium. The actual quote and premium you'll pay may differ and depend on where your house is located and what kind of house it is.
Earthquake statistics were gathered from the Federal Emergency Management Agency (FEMA), the U.S. Geological Survey and the California Earthquake Authority.
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