How Much Does Earthquake Insurance Cost in California?

How Much Does Earthquake Insurance Cost in California?

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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 to 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. 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.

City
Average coverage rate
Average annual cost for $500,000 of coverage
Alameda$6.47$3,233
Big Bear Lake$3.41$1,704
Burbank$4.21$2,104
Calexico$5.82$2,912
Chula Vista$3.04$1,518
Concord$4.61$2,306
Corona$3.65$1,827
Fair Oaks$2.46$1,230
Fairfield$3.73$1,864
Fresno - Biola Junction$2.47$1,235
Irvine$3.22$1,610
Lake Tahoe$2.54$1,269
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Rates are per thousand dollars of coverage.

Los Angeles

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.

San Diego

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.

San Francisco

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 ranged 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.

A bar graph showing the cost of cheap earthquake insurance
A bar graph showing the cost of cheap earthquake insurance

The companies with the three lowest earthquake insurance rates were Cincinnati Insurance Co., Privilege Underwriters Exchange and AIG, with average rates ranging from 10 cents to $1.30 for each thousand dollars of coverage.

On the other hand, the three companies charging the highest rates were Aegis Security, American Modern and Pacific Specialty. These insurers quoted rates that were 16 to 150 times higher than the cheapest competitors. For these pricier carriers, rates were fairly consistent and were not greatly affected by whether a homeowner lived in a low-risk or a high-risk area for tremors.

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 nonprofit 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 flood waters would require a separate flood insurance policy.

Methodology

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.

All 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 FEMA, the U.S. Geological Survey and the California Earthquake Authority.

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