2024 Best California Residential Earthquake Insurance Policies | CEA (2024)

FAQs

Is California Earthquake Authority insurance worth it? ›

Without earthquake insurance coverage in California, you will be responsible for 100 percent of the cost to repair your home, and replace your belongings after a damaging earthquake strikes. Given the potential cost to repair shake damage, the cost of a CEA policy may be an easy expense to justify.

Earthquake insurance covers some of the losses and damage that earthquakes can cause to your home, belongings, and other buildings on your property. If you have a mortgage, you must have homeowners insurance. But you do not have to buy earthquake insurance.

While CEA is a well-known organization that offers earthquake insurance in California through its participating carrier partners, there are also private insurance companies, such as GeoVera, that offer stand-alone earthquake coverage. Each carrier has different policy terms, coverage options, and pricing.

The typical annual cost of earthquake insurance in California is $3.54 per thousand dollars of coverage. The exact cost depends on the earthquake risk level in the policyholder's area, the type and amount of coverage they choose, their deductible percentage, and the construction of their home.

Earthquake insurance costs thousands of dollars a year on top of your standard home insurance policy. Earthquake insurance is more expensive in areas located near fault lines that are at higher risk for quakes. The high policy cost and high deductibles mean many homeowners go without earthquake insurance.

The deductible for earthquake insurance is usually 10%–20 % of your coverage limit. For example, if you insured your home for $200,000, a 10% deductible would be $20,000, which you will have to pay. Remember, a larger deductible means you'll have to pay more for losses.

Homeowners insurance typically doesn't include earthquake coverage. However, if you live in an area at risk for tremors, your home insurer may offer separate earthquake policies or an earthquake endorsem*nt you can add to your policy for an additional premium.

You also can't deduct premiums paid out for flood or earthquake insurance. Any disaster relief assistance payments would be considered untaxed income. If you receive money for disaster relief, that income isn't taxed. However, disaster relief insurance premiums aren't tax deductible.

The California Earthquake Authority

It is a not-for-profit organization, and its premiums reflect the latest science around earthquake risk in California. A CEA insurance policy offers the following coverage options: Dwelling. Personal property.

In fact, only 13 percent of the state's residents have earthquake insurance, according to California Earthquake Authority CEO Glenn Pomeroy, because they don't think it's going to happen to them.

Does USAA provide earthquake insurance? ›

Our standard renters policy is anything but — it includes coverage for both flood and earthquake damage.

Location of the home: If your home is a high-risk location, you should expect to pay more for earthquake insurance. Age of the home: If you have an older home, without upgraded safety features to mitigate earthquake damage, then you'll likely pay more for coverage.

Your earthquake insurance company will set limits on your dwelling (house) coverage, similar to what you have on a homeowners insurance policy. The dwelling portion provides funding to repair or rebuild your house if it's damaged or destroyed, so you want to make sure you have enough coverage.

Why Retrofitting is Necessary? Properly retrofitted houses are made stronger against earthquake shaking and damage. This means your house is safer, and you've reduced the chance of injury or even death in a devastating earthquake. You have invested a lot of time and money into your older house.

FEMA offers various grants to assist individuals and households affected by disasters. While FEMA does not typically provide direct financial assistance for earthquake damage, it may offer grants to help homeowners or renters elevate their homes to reduce future earthquake risks.

CEA has an B++ (Good) rating from A.M. Best Co., the world's leading rating agency of insurance companies. Q: Could CEA pay all of its claims if there is an earthquake? A. CEA has a claim-paying capacity of about $20 billion .