There’s no getting around it: Earthquake insurance can be expensive, and the more likely you are to need it, the more it will likely cost you. But the exact cost of your policy will vary based on the specifics involved. Below is a look at some of the factors that will impact your earthquake insurance costs:
- Your deductible: In general, a higher deductible leads to lower insurance premiums. Deductibles for this type of insurance policy tend to range from 10% to 20% of your coverage limit.
- 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.
- Number of stories in the home: A home with multiple stories will likely cost more to insure against earthquakes than a single-story home.
- Rebuilding cost: The estimated rebuilding costs have a big impact on your insurance costs. A higher home value and rebuilding cost will likely lead to higher insurance premiums.
As a general range, annual earthquake insurance premiums can fall anywhere from $800 – $5,000, and policy deductibles can be as high as 10% – 20% of your coverage limit. But it’s important to shop around to find the right policy type and price point for your situation.
The Cost Of Earthquake Insurance In California
Since California is a relative hotspot for earthquakes in the United States, residents tend to face much higher earthquake insurance premiums than the rest of the country.
On average, homeowners in California pay an average of $739 per year for earthquake insurance. However, your exact costs can vary widely based on the amount of coverage you need, the home’s risk and other factors.
How To Save Money On Earthquake Insurance
If you want earthquake insurance, shopping around can help you save money. Each insurance company has a slightly different method of determining rates, which can help you lock in a lower price when you compare quotes.
Another way to lower your earthquake insurance costs in California is to commit to a seismic retrofit. This strengthens your home’s structure against earthquakes, which can lead to a discount between 10% and 25%. Of course, a retrofit can cost thousands of dollars. But depending on your income and location, you might be eligible for a grant of up to $3,000 to help cover the costs of a seismic retrofit through the California Earthquake Authority.
Additionally, choosing a higher deductible can help you find a lower insurance premium. But you’ll be on the hook for more if an earthquake does actually damage your home.
FAQs
Whether you should buy insurance for earthquakes depends on where you live and your tolerance for risk. If you live near a fault line and would have a hard time paying for expensive repairs after a quake, buying earthquake insurance may be a smart idea.
What is the average cost of earthquake insurance? ›
The Cost Of Earthquake Insurance In California
On average, homeowners in California pay an average of $739 per year for earthquake insurance. However, your exact costs can vary widely based on the amount of coverage you need, the home's risk and other factors.
What percentage of people have earthquake insurance? ›
A poll by the Insurance Information Institute indicated that only 11% of American homeowners had earthquake insurance. Overview: There are several key reasons why many people do not obtain earthquake insurance.
How do you know if you need earthquake insurance? ›
You should consider the following factors when deciding whether or not to get earthquake insurance: proximity to active earthquake faults. seismic history of the region (frequency of earthquakes) time since last earthquake.
What percentage of Californians buy earthquake insurance? ›
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.
Do most people have earthquake insurance? ›
Despite experiencing 90% of the country's earthquakes, only 10% of California's residents have earthquake insurance. Only 11.3% of Washington's residents were covered in 2017 despite having the second-largest market in the seismic space.
Is earthquake insurance tax deductible? ›
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.
How much is AAA earthquake insurance? ›
AAA earthquake insurance is available to renters and homeowners in California. The average policy costs approximately $850 per year. Your total premium will depend on various factors, including the age and location of your home.
Does FEMA pay for earthquake damage? ›
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.
What does earthquake insurance not cover? ›
As with most earthquake policies, CEA insurance does not cover landscaping, pools, fences, masonry, or separate buildings. If you rent from someone else or own a condo, you do not need this coverage.
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.
Why don't Californians have earthquake insurance? ›
Though California has nearly 16,000 known earthquake faults, you are not required by state law to carry earthquake insurance. Your basic homeowners and renters insurance policies do not cover earthquake damage.
Does earthquake insurance cover foundation cracks? ›
If the foundation cracks, the walls collapse, or the floor falls, you're covered. Equally important, if you suffer damage, earthquake insurance can cover the cost of moving to a temporary alternative location while your property is repaired, as well as the cost of the repairs, and other related expenses.
What happens if my house is destroyed in an earthquake? ›
Homeowner's insurance policies exclude damage caused by earthquakes. This means that if your house is damaged or destroyed in an earthquake, your standard homeowner's policy will not pay to repair or replace it. In order to be covered for earthquake damage, you must purchase a separate earthquake insurance policy.
Why is my earthquake insurance so expensive? ›
Factors that impact the cost of earthquake insurance
Your home's proximity to a seismic zone. Your home's age. Your foundation and construction type (masonry will mostly likely be more expensive to insure) The deductible you choose.
Is it smart to have earthquake insurance in California? ›
Earthquakes can cause extensive damage to the foundation, siding and roof of homes. Older homes built before 1980 on a raised foundation are especially vulnerable if they are not retrofitted. Without residential earthquake insurance you will be responsible for all repair and/or rebuilding costs.
Does regular homeowners insurance cover earthquakes? ›
In California, your residential insurance policy doesn't cover your home or your belongings against earthquakes. If you don't have an earthquake insurance policy, you're not covered for earthquake damage or any additional costs needed to live elsewhere while your home is being repaired or rebuilt after a quake.
What deductible should I choose earthquake insurance? ›
TOP THINGS TO CONSIDER
The deductible for earthquake insurance is usually 10%–20% of the coverage limit. For example, if your home is insured for $200,000 a 10% deductible would be $20,000. Depending on the policy, there may be separate deductibles.
