From the Windows to the Walls: California Homeowners Consider Earthquake Coverage


By: Kristin Ingulsrud
Californians witnessed a series of earthquakes over the recent Fourth of July Weekend, prompting a ten-fold increase in visits to the California Earthquake Authority’s (“CEA”) website.
The CEA is California’s primary earthquake insurer, created after the devasting 1994 Northridge Earthquake, which measured in at a magnitude of 6.7 and caused $20 billion in damages.  The recent earthquakes measured at 7.1 and 6.4 magnitudes, but were centered in a less urban area—insurance payouts are estimated at less than $1 billion.
Geological research known as the Uniform California Earthquake Ruptured Forecast predicts an increasing likelihood of additional large earthquakes.  So why do only 13% of California homeowners have earthquake insurance?
There’s the cost—earthquake coverage adds an average of $800 a year in premiums.  Many Californians also have sizeable mortgages to consider, reasoning that more of the risk is carried by the bank.  Deductibles are high, ranging from 5% to 25%.  Typical damages from an earthquake may be less than the standard 15% deductible, making it reasonable for some homeowners to self-insure.  Some residents may decide they are better served by investing their money into safety upgrades.
Even given these variables, it is still surprising that only 13% of California homeowners carry earthquake insurance.  It remains to be seen whether the recent Ridgecrest earthquakes will serve as a wake-up call sufficient to increase the rates of earthquake coverage among California homeowners.
If you have any questions or would like more information, please contact Kristin Ingulsrud at