Most homeowners understand that earthquakes happen. If you live in California or other seismic zones, you know the risk exists. But many homeowners don’t realize that their standard homeowners insurance policy doesn’t cover earthquake damage.
This gap in coverage creates a dangerous financial vulnerability. An earthquake can cause hundreds of thousands of dollars in damage to your home. Without it, you’re entirely responsible for those costs.
This isn’t a hypothetical scenario. The 2011 Christchurch earthquake in New Zealand caused $40 billion in damage. The 1995 Kobe earthquake in Japan cost $100 billion. California experiences regular seismic activity. The question isn’t whether earthquakes will happen, but whether you’ll be financially prepared when they do.
Let’s look at why earthquake insurance matters for homeowners and what you need to know about coverage.
Standard Homeowners Insurance Doesn’t Cover Earthquakes
This is the critical fact most homeowners don’t understand: Your standard homeowners policy explicitly excludes earthquake damage.
Helpful Facts
- Standard homeowners insurance doesn't cover earthquake damage — it's explicitly excluded, so you need a separate earthquake policy for protection.
- Earthquake insurance premiums are affordable ($200-$500 annually) but deductibles are high (10-20% of home value) — this structure keeps premiums reasonable while providing catastrophic protection.
- California has a 72% probability of magnitude 6.7+ earthquakes in the next 30 years — earthquake damage can reach hundreds of thousands of dollars, making insurance essential financial protection.
- High deductibles exist for economic reasons — lower deductibles would require much higher premiums, so homeowners trade higher out-of-pocket costs for affordable coverage.
- Earthquake insurance covers structural damage, attached fixtures, detached structures, and debris removal — but typically excludes personal belongings inside your home and tsunami/landslide damage.
Homeowners insurance covers fire, wind, theft, and other perils. It covers water damage from burst pipes or storms. But earthquake damage is specifically excluded from standard coverage.
Why? Earthquakes are considered catastrophic events with potential for massive, widespread damage. Insurance companies can’t predict earthquake frequency or severity reliably. The financial exposure is too large for standard homeowners policies to absorb.
This means that if an earthquake damages your home, you have two options: pay for repairs out of pocket or have a separate earthquake insurance policy. There’s no middle ground.
What Earthquake Insurance Actually Covers
Earthquake insurance is a separate policy that covers structural damage to your home caused by earthquakes. Coverage includes:
- Damage to the foundation and structural components of the house. This includes walls, floors, roofing, and supporting structures.
- Damage to permanently attached fixtures like built-in cabinets, installed appliances, and attached carports.
- Damage to detached structures on your property like garages, sheds, or fences.
- Cleanup and debris removal costs related to earthquake damage.
What earthquake insurance typically doesn’t cover: damage from tsunamis or landslides triggered by earthquakes (these usually require separate policies), damage that occurs after the earthquake from fire (though you may have fire insurance coverage), and damage to personal belongings inside your home (you may need separate coverage).
How Much Does Earthquake Insurance Cost?
Earthquake insurance premiums vary based on several factors: your home’s age and construction type, location and proximity to fault lines, your home’s replacement cost, and your chosen deductible.
Typical annual premiums range from $200 to $500 for homes in moderate-risk areas, and $500 to $1,500 for homes in high-risk seismic zones. In California, average premiums are around $500 annually for a $500,000 home.
Deductibles are typically higher for earthquake insurance than standard homeowners insurance. Most earthquake policies have deductibles of 10 to 20 percent of your home’s insured value. This means if your home is insured for $500,000 and your deductible is 15 percent, you’d pay $75,000 out of pocket before insurance coverage begins.
This sounds expensive, but consider the alternative: without earthquake insurance, you’d pay 100 percent of earthquake damage costs out of pocket.
Why the High Deductibles Make Sense
High deductibles on earthquake insurance seem frustrating, but they serve a financial purpose. They reflect the actual risk and uncertainty around earthquake damage.
Here’s the economics: If earthquake insurance had low deductibles like standard homeowners policies, premiums would be dramatically higher. Insurance companies would need to charge significantly more to cover the increased financial exposure.
By accepting higher deductibles, homeowners can get earthquake coverage at reasonable premium costs. You’re essentially saying, “I can handle smaller earthquake damage myself, but I need protection against catastrophic damage.”
For most homeowners, earthquake insurance provides catastrophic protection. It prevents a major earthquake from bankrupting you, even if you pay a substantial deductible.
Why Earthquake Insurance Matters Right Now
California experiences frequent seismic activity. The U.S. Geological Survey estimates a 72 percent probability of magnitude 6.7 or larger earthquakes in California over the next 30 years.
Magnitude 6.7 earthquakes cause serious structural damage to homes. The 1989 Loma Prieta earthquake (magnitude 6.9) damaged or destroyed tens of thousands of homes. Repair costs ranged from tens of thousands to hundreds of thousands of dollars.
If you own a home and don’t have earthquake insurance, you’re accepting financial risk that could wipe out years of equity in your property.
Frequently Asked Questions
Does earthquake insurance cover aftershocks? Yes, aftershocks that cause additional damage are covered under most earthquake policies.
Can I get earthquake insurance if my home is old? Most older homes can get earthquake insurance, though premiums may be higher. Very old or poorly constructed homes might face limitations or higher deductibles.
Does earthquake insurance cover my belongings inside the home? Standard earthquake policies cover structural damage to the home but not personal property damage. You may need separate coverage for belongings.
What’s the difference between earthquake insurance and earthquake retrofitting? Retrofitting (strengthening your home’s foundation and structure) reduces earthquake damage and can lower insurance premiums. Insurance protects you financially if damage occurs. Both are valuable.
How quickly does earthquake insurance take effect? Most policies have a waiting period of 10 to 30 days after purchase before earthquake coverage becomes active. You can’t wait until an earthquake is predicted to buy coverage.
Will my home insurance company automatically offer earthquake coverage? No. You must request earthquake coverage as a separate policy addition or separate policy purchase. Your agent won’t automatically include it.
Making the Decision
Earthquake insurance isn’t required by law unless your lender mandates it. But that doesn’t mean it’s optional for smart homeowners in earthquake zones.
The decision comes down to financial preparedness. Can you afford to pay for earthquake damage out of pocket? For most homeowners, the answer is no. An earthquake causing $100,000 in damage would be financially devastating without insurance.
Earthquake insurance ensures that if an earthquake damages your home, you have financial protection. You’re not betting your home equity and financial security on the hope that an earthquake won’t happen.
The cost of earthquake insurance is modest compared to the potential financial impact of earthquake damage. For homeowners in California and other seismic zones, it’s insurance that actually protects your most valuable asset.
How Can Post Insurance Help?
Providing “Smarter Insurance Since 1954,” Post Insurance is a third-generation insurance agency with extensive expertise in homeowners insurance and earthquake coverage options. Our team understands the unique risks facing California homeowners and works with over 50 top insurance companies to find earthquake insurance solutions that fit your needs and budget.
We recognize that earthquake insurance involves complex decisions about coverage levels, deductibles, and costs. Our experienced team helps homeowners evaluate their earthquake risk, understand coverage options, and choose policies that provide financial protection without unnecessary expense.
Whether you’re a first-time homebuyer unsure about earthquake coverage or an existing homeowner looking to update your protection, we can help you make an informed decision. If you have questions about earthquake insurance or would like to receive a quote, please fill out our contact form or call 800.262.9998. We’ll review your situation and help you find the right coverage for your home and peace of mind.