Earthquake Coverage: How It Works and What’s Included

Earthquakes in California are a matter of “when” not “if.” It’s important to be prepared for the likelihood of such a natural disaster— but how does earthquake insurance work, and what’s included in your coverage?

We’ll explain:

What’s Covered and What’s Not

It’s important to note that earthquake coverage is typically not included in a homeowners insurance policy— talk to your insurer or consider switching to independent California agency insurance services for access to the best providers, coverage options and prices available.

Earthquake insurance covers three main components: damage to your home, personal property and additional living expenses. Typical exclusions include fire damage, mudslides, vehicle damage and flooding.

Example of California Earthquake Insurance Cost

Here are two examples of a CEA (California Earthquake Authority) quote options:

#1 “Mini” Policy Dwelling Value: $800,000

Personal Property: $5,000
Loss of Use: $1,500
15% deductible: $1,399
20% deductible: $1,126

#2 “Maxi” Policy Dwelling Value: $800,000

Personal Property: $200,000
Loss of Use: $100,000
15% Deductible: $2,117
20% Deductible: $1,751

NHC’s California agency insurance services provide free California earthquake insurance cost estimates. Request a quote here.

Common Mistakes with Earthquake Insurance

There are many common mistakes homeowners make when considering earthquake insurance. First, residents under the jurisdiction of HOAs assume that the association will cover the costs of earthquake damage— this is typically untrue. Every owner should have their own insurance policy that covers their personal property, improvements to the home and coverage to live elsewhere during repairs. Most HOAs don’t include coverage for the unit owner’s interior or personal property.

We also see many homeowners missing loss assessment coverage. This is important and covers losses to the common areas of the community such as a game room, pool area, courtyards or parking structures to name a few. If there is a loss, the unit owners are generally assessed for their portion of the damages to those common areas. Loss Assessment pays this for the unit owner, up to the limit chosen. It’s imperative to have your agent review your association’s CCRs.

Contact NHC Insurance Services

If you’re unsure of your coverage or haven’t had your CCRs reviewed, don’t hesitate to reach out to NHC’s California agency insurance services. We’ll happily review them to let you know where coverage is lacking and then help you fill in the gaps with sound policies from top-rated insurance providers.