Earthquake Insurance: You Have Questions. We Have Answers.

Hoffman Hanono
April 16, 2022

If you live in California, you know that earthquakes come with the territory. What you may not know is that while California mortgage holders must have homeowners insurance, they are not required to carry earthquake insurance. But should they? We’ll answer that question and many more below.

What Does Earthquake Insurance Cover?

Basic homeowner’s insurance packages generally cover interior and exterior damages caused by theft and fire, but they don’t cover earthquake damage. The California Earthquake Authority (CEA) offers a three-part protection system:

  • Dwelling protection: This covers the cost to repair or rebuild your home.
  • Personal property coverage: This kicks in to help pay for the replacement of damaged personal items.
  • Loss of use coverage: This covers temporary living expenses if your home is uninhabitable.

What Doesn’t Earthquake Insurance Cover?

Earthquake insurance has several exclusions and does not cover:

  • Fire damage: Although earthquake insurance does not cover fire damage, homeowner’s insurance covers it, even if an earthquake causes the fire damage.
  • Land damage: Generally, earthquake insurance does not cover land damage includingsinkholes or erosion caused by an earthquake.
  • Vehicle damage: Earthquake insurance does not cover vehicle damage. Check with your auto insurer for details on coverage.
  • Flood: Earthquake insurance does not cover water damage if the source is outside your home. So, if you live near a lake and an earthquake causes water to rise and flood your home, you will not be covered. You must purchase flood insurance separately.

Do I Really Need Earthquake Insurance?

Whether you choose to carry earthquake insurance is entirely up to you. Here are some tips to help you make the decision:

  • Cost: You can determine the cost of earthquake insurance by using the CEA’s free earthquake insurance estimate calculator.
  • Determine risk: Do you live near a fault line where earthquakes are common? If you’re not sure, visit the U.S. Geological Survey website for details.
  • Type of home: Older, two-story homes built from brick or other masonry are at a higher risk of being damaged by an earthquake.
  • Government assistance: While the federal government may provide low-interest loans after a natural disaster, you must prove that you can pay for the loans. Grants from the Federal Emergency Management Agency (FEMA) are only available for those who do not qualify for loans.

Helping You Find the Right Insurance Policy

Hoffman Hanono has offered affordable insurance solutions since 1959. Lean on our experience, and we’ll help you find a comprehensive policy that fits your budget and needs, no matter what they are. And if you have questions about earthquake insurance, we’re happy to help answer them for you. Contact us today!