| Earthquake Awareness and Preparedness |
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| Peak Rock Acceleration for California State |
| Peak Rock Acceleration for San Francisco |
| Peak Rock Acceleration for Los Angeles |
Earthquake Insurance in California
Recent earthquakes in Haiti, Chile, Mexico, New Zealand and Japan are wake-up calls for Californians that
an earthquake can happen any time and earthquake preparedness is essential. Actually, California has a
99.7% chance of having an earthquake magnitude of 6.7 or larger by 2032 according to a recent research
study by the United States Geological Survey (USGS). Such an earthquake which would be more powerful
than the 1994 Northridge Earthquake is expected to cause significant loss of life and extensive damage to
homes, businesses, transportation systems and utilities.
Recent earthquakes in Haiti, Chile, Mexico, New Zealand and Japan are wake-up calls for Californians that
an earthquake can happen any time and earthquake preparedness is essential. Actually, California has a
99.7% chance of having an earthquake magnitude of 6.7 or larger by 2032 according to a recent research
study by the United States Geological Survey (USGS). Such an earthquake which would be more powerful
than the 1994 Northridge Earthquake is expected to cause significant loss of life and extensive damage to
homes, businesses, transportation systems and utilities.
California Earthquake Authority (CEA) is a privately-funded, publicly-managed organization that provides
catastrophic residential earthquake insurance and encourages Californians to reduce their risk of
earthquake loss. CEA sees Christchurch as a community better prepared for the two large earthquakes
that recently rocked New Zealand, where almost 100% of homes in that country have earthquake
insurance. On the other hand, only 12% of California homes currently have earthquake insurance, where
most residents are living within 30 miles of active fault lines like San Andreas Fault and Hayward Fault.
This percentage went down from 33% in 1996, when the devastating Northridge Earthquake was still fresh
in people's minds, according to California Department of Insurance. To encourage more Californians to
buy earthquake insurance coverage, CEA approved an average 22% insurance rate cut, which went into
effect July 1st 2006. This rate cut was due to the sharp drop in the cost of reinsurance and several years
without a major earthquake, allowing to buildup reserves.
All insurance companies that sell residential property insurance in California are required by law to offer
earthquake insurance to homeowners when the home insurance policy is first sold and then every two
years thereafter. Homeowners can decide to purchase it, purchase a policy from another insurer, or
decline it altogether. Homeowners, mobile home owners, condominium owners and renters can also get
coverage from the participating insurance companies that are members of CEA. The standard earthquake
insurance policy from CEA is designed to provide basic coverage (or enhanced coverage of the
homeowner choice) against earthquake damage, which covers the home structure, home contents and
personal possessions subject to a 15% standard deductible with some limitations and exclusions.
catastrophic residential earthquake insurance and encourages Californians to reduce their risk of
earthquake loss. CEA sees Christchurch as a community better prepared for the two large earthquakes
that recently rocked New Zealand, where almost 100% of homes in that country have earthquake
insurance. On the other hand, only 12% of California homes currently have earthquake insurance, where
most residents are living within 30 miles of active fault lines like San Andreas Fault and Hayward Fault.
This percentage went down from 33% in 1996, when the devastating Northridge Earthquake was still fresh
in people's minds, according to California Department of Insurance. To encourage more Californians to
buy earthquake insurance coverage, CEA approved an average 22% insurance rate cut, which went into
effect July 1st 2006. This rate cut was due to the sharp drop in the cost of reinsurance and several years
without a major earthquake, allowing to buildup reserves.
All insurance companies that sell residential property insurance in California are required by law to offer
earthquake insurance to homeowners when the home insurance policy is first sold and then every two
years thereafter. Homeowners can decide to purchase it, purchase a policy from another insurer, or
decline it altogether. Homeowners, mobile home owners, condominium owners and renters can also get
coverage from the participating insurance companies that are members of CEA. The standard earthquake
insurance policy from CEA is designed to provide basic coverage (or enhanced coverage of the
homeowner choice) against earthquake damage, which covers the home structure, home contents and
personal possessions subject to a 15% standard deductible with some limitations and exclusions.
California Earthquake Insurance
Earthquake insurance policies in California feature a high deductible, which makes this type of insurance
very useful if the entire home is destroyed or has moderate-to-severe earthquake damage, but would not
be useful if the home is merely damaged. Earthquake insurance coverage is available either in the form of
an endorsement or as a separate policy.
Earthquake insurance policies in California feature a high deductible, which makes this type of insurance
very useful if the entire home is destroyed or has moderate-to-severe earthquake damage, but would not
be useful if the home is merely damaged. Earthquake insurance coverage is available either in the form of
an endorsement or as a separate policy.
Insurance Premium
Earthquake insurance premiums in California vary widely based on factors listed below. Average
insurance rates of CEA basic policy range $3.91-$5.25 per $1,000 of coverage. You can estimate your
earthquake insurance premium using CEA online calculator at www.earthquakeauthority.com. Higher
insurance rates are associated with:
Earthquake insurance premiums in California vary widely based on factors listed below. Average
insurance rates of CEA basic policy range $3.91-$5.25 per $1,000 of coverage. You can estimate your
earthquake insurance premium using CEA online calculator at www.earthquakeauthority.com. Higher
insurance rates are associated with:
 | Proximity of the home with respect to active fault lines because buildings within 30 miles (if not | |
| retrofitted) would probably experience earthquake damage and even collapse from moderate-to- strong ground shaking. | ||
| The home is located in an area prone to soil liquefaction or landslides as the likelihood of | |
| earthquake damage would be higher in such area. | ||
| Predominantly poor soil conditions beneath the concrete foundations of the building because the | |
| ground shaking will most likely be amplified. | ||
| Year built where older homes cost more to insure than newer ones because houses built before the | |
| 1980’s (if not retrofitted) lack earthquake-resisting system in their structural design and are not constructed per the seismic recommendations of current building codes. | ||
| Number of stories where multi-story houses are more vulnerable to earthquake ground shaking and | |
| structural damage than single-story houses. | ||
| Unreinforced masonry construction and nonductile reinforced concrete construction both have higher | |
| rates among all other construction materials (especially timber frame houses), because of their well- known poor structural performance during earthquakes. | ||
| The insured value of the home and the optional coverage selected by the homeowner. | |
Basic Coverage
| Up to the insured value of the home as stated on the home insurance policy. | |
| $5,000 in personal possessions coverage. | |
| $1,500 for additional living expenses due to “loss of use” if the home is uninhabitable while being | |
| repaired. | ||
| Emergency repairs up to 5% of the insured value of the home. | |
| Up to $10,000 to replace, stabilize, or restore the soil that supports the home foundations including | |
| engineering costs. |
Optional Coverage
| 10% deductible on home and home contents instead of 15% standard deductible. | |
| Up to $100,000 in home contents coverage. | |
| Up to $15,000 for “loss of use”. | |
| Insurance for other structures. | |
| Up to $25,000 for personal possessions coverage. | |
| Additional $10,000 in current building codes upgrade. | |
| Up to 5% of the insured value of the home for debris-removal costs. | |
Exclusions
| Detached garages, motor vehicles, boats and trailers. | |
| Swimming pools, fences, patios, decks, walkways and driveways. | |
| Exterior masonry veneer except stucco. | |
| Landscaping and irrigation systems. | |
| Antennas and satellite dishes. | |
| Mirrors, chandeliers, stained glass and mosaics. | |
| Certain personal property including glassware, crystal, porcelain and artwork. | |
Limitations
| $5,000 to repair or replace all chimneys. | |
| $250 for money, bank notes, coins and medals. | |
| $300 for business property. | |
| $1,000 for damage to computers and printers. | |
Tsunamis and Flood Insurance
Homeowners insurance view tsunamis as an act of God generated by earthquake-induced movement of
the ocean floor, and therefore exclude them from insurance coverage. In addition, California earthquake
insurance does not cover losses from flooding due to tsunamis that may hit the West Coast if a major
earthquake displaces the floor of the Pacific Ocean. The 2011 Japan Earthquake in Japan that generated a
mega tsunami devastating the northeast coast of Honshu and causing $309 billion estimated damage to
buildings and infrastructure demonstrated the importance of tsunami insurance, only for Californians living
few miles from the West Coast within a tsunami risk area that is less than 25 feet above the Pacific Ocean
level.
Homeowners living near the shoreline shall check if historical tsunamis occurred in their area by
contacting the local emergency management office, the National Weather Service office, or the American
Red Cross chapter. If the home is located within a tsunami risk area, the homeowner can get tsunami
insurance through the National Flood Insurance Program (NFIP) by purchasing a stand-alone tsunami
insurance or flood insurance that specifically include losses due to tsunamis.
Homeowners insurance view tsunamis as an act of God generated by earthquake-induced movement of
the ocean floor, and therefore exclude them from insurance coverage. In addition, California earthquake
insurance does not cover losses from flooding due to tsunamis that may hit the West Coast if a major
earthquake displaces the floor of the Pacific Ocean. The 2011 Japan Earthquake in Japan that generated a
mega tsunami devastating the northeast coast of Honshu and causing $309 billion estimated damage to
buildings and infrastructure demonstrated the importance of tsunami insurance, only for Californians living
few miles from the West Coast within a tsunami risk area that is less than 25 feet above the Pacific Ocean
level.
Homeowners living near the shoreline shall check if historical tsunamis occurred in their area by
contacting the local emergency management office, the National Weather Service office, or the American
Red Cross chapter. If the home is located within a tsunami risk area, the homeowner can get tsunami
insurance through the National Flood Insurance Program (NFIP) by purchasing a stand-alone tsunami
insurance or flood insurance that specifically include losses due to tsunamis.
Who should buy Earthquake Insurance?
The USGS earthquake map below for California and Nevada shows the peak acceleration (PGA) with 2%
probability of exceedance in 50 years as a ratio of the acceleration due to gravity (g) at the elevation of the
base rock, which will probably be amplified to the ground surface at your home during an earthquake.
Earthquake insurance would be beneficial at seismic zones exceeding 0.35g, which are represented by
the colors: dark brown, brown, red and orange. A detailed earthquake map for the Greater Los Angeles
Metropolitan Area and for San Francisco Bay Area is also shown below.
Remember to cover your vehicle(s) under the comprehensive part of the auto insurance policy.
Return back to Earthquake Insurance
The USGS earthquake map below for California and Nevada shows the peak acceleration (PGA) with 2%
probability of exceedance in 50 years as a ratio of the acceleration due to gravity (g) at the elevation of the
base rock, which will probably be amplified to the ground surface at your home during an earthquake.
Earthquake insurance would be beneficial at seismic zones exceeding 0.35g, which are represented by
the colors: dark brown, brown, red and orange. A detailed earthquake map for the Greater Los Angeles
Metropolitan Area and for San Francisco Bay Area is also shown below.
Remember to cover your vehicle(s) under the comprehensive part of the auto insurance policy.
Return back to Earthquake Insurance