Last Updated on October 15, 2026 by Syed Sarim Naqvi
Earthquake insurance is a separate policy or endorsement that covers shaking damage excluded from standard homeowners cover, and in California it carries deductibles of 5% to 15% of the dwelling limit, so a $500,000 dwelling limit means $25,000 to $75,000 paid by you first. Only about one in ten California homeowners buys it, and sources put premiums anywhere from about $739 to $1,770 a year depending on the home and the deductible chosen.
Key Takeaways
- Standard homeowners policies exclude earthquakes and earth movement; California insurers must offer cover every two years, but buying it is optional
- The California Earthquake Authority says about 10% of California homeowners carry it, and CEA writes about two-thirds of residential policies
- Deductibles run 5% to 15%, and homes worth over $1 million or built before 1980 without retrofit face a 15% minimum
- Reported average premiums range from about $739 to $1,770 a year, depending on source, home value and deductible
- The 1994 Northridge earthquake produced insured losses of roughly $12.5 billion to $15.3 billion and led to the creation of the CEA in 1996
What Is Earthquake Insurance?
Old Harbor explains that standard homeowners policies exclude earthquakes and earth movement, and that California insurers must offer earthquake cover at least once every two years, but homeowners must actively accept it. Fire that follows an earthquake is a different matter: Old Harbor notes it is covered under the homeowners policy. EarthquakeTracker says the CEA sells two tiers, a Standard Homeowners policy and a Homeowners Choice policy. The CEA also includes cover for additional living expenses with no deductible, according to Old Harbor.
Why Does California Have the CEA?
Before the 1994 Northridge earthquake, Insurance Journal reports, earthquake cover was an endorsement on the homeowners policy. Northridge changed that. The CEA’s own history says the quake caused an estimated $20 billion in residential damage, only half of it insured, and that by January 1995 insurers representing 93% of the homeowners market had restricted or stopped writing policies. The legislature created the CEA in 1996. AIR Worldwide says Northridge insured losses of $12.5 billion exceeded the earthquake premiums collected over the previous 80 years, while Insurance Journal cites $15.3 billion, so sources differ on the exact total.
| Dwelling Limit | 5% Deductible | 15% Deductible |
|---|---|---|
| $300,000 | $15,000 | $45,000 |
| $500,000 | $25,000 | $75,000 |
| $750,000 | $37,500 | $112,500 |
The figures follow EarthquakeTracker’s CEA deductible table; the dwelling limits are implied by the percentages.
How Much Does Earthquake Insurance Cost?
United Policyholders says estimates vary but Californians pay about $739 a year on average. EarthquakeTracker, citing 2024 California Department of Insurance rate data, puts the average at about $1,770 a year for a single-family home with a $500,000 replacement cost. A local report quoted an agent describing a La Crescenta home with a policy costing about $900 a year and a $54,000 deductible. Old Harbor says choosing a 15% deductible can lower the premium by roughly 35% to 40%.
The sources disagree because averages mix very different homes, so use them as a range and get quotes. Main cost drivers:
- Location and local shaking risk
- Replacement cost of the home
- Deductible choice from 5% to 15%
- Whether the home is retrofitted and when it was built
As an illustration, not a quote, a $600,000 home with a 15% deductible leaves you paying the first $90,000 of damage, which is Old Harbor’s own example.
Why Do So Few Homeowners Buy It?
Insurance Journal cites a 10.6% take-up rate in 2014, and the CEA still says about one in ten today. Hartford Business quoted a UC Davis professor who said most homeowners will never exceed the deductible even when damage occurs, because earthquake damage often falls below 15% of a home’s value. The same report notes some owners worry the CEA could stop paying if catastrophic losses exceed its reserves, while the CEA’s chief executive at the time said it could handle two Northridge-size quakes. United Policyholders adds that many people dropped cover when home insurance prices rose, and that the CEA stopped offering 5% and 10% deductibles to homes worth over $1 million or built before 1980 without retrofit.
What Should You Check Before Buying?
- Deductible: calculate the dollar amount at your dwelling limit, not the percentage
- Retrofit and age: older unretrofitted homes face the 15% minimum
- Exclusions: read what the policy covers and omits, since CEA cover is a defined package and the Homeowners Choice tier differs from the Standard policy
- Living expenses: confirm additional living expense cover and its limit
- Private options: compare CEA policies with private earthquake cover, especially for high-value homes
How Does This Connect to Other Home Risks?
Earthquake is one of several perils standard policies leave out. See High-Value Home Insurance Explained for how luxury homes handle rebuild cost, and Short-Term Rental Insurance Explained for property that is also used commercially. For another weather-linked cover, read Rain and Event Weather Insurance Explained.
FAQ
Does homeowners insurance cover earthquakes?
No. Standard policies exclude earthquakes and earth movement, though fire after an earthquake is covered.
How much is earthquake insurance in California?
Sources cite averages from about $739 to $1,770 a year, depending on the home and deductible.
What is the deductible?
Typically 5% to 15% of the dwelling limit, with 15% required for homes over $1 million and some older unretrofitted homes.
Is earthquake insurance required?
No. Insurers must offer it every two years, but buying is optional.
Who is the California Earthquake Authority?
A publicly managed, privately funded entity created in 1996 that sells about two-thirds of residential earthquake policies.
Why did the CEA start?
After Northridge, insurers restricted or stopped writing homeowners policies, and the legislature stepped in.
Does cover include living expenses?
Old Harbor says CEA policies include additional living expenses with no deductible.
Glossary
- Deductible: the share of loss you pay before the policy pays; for earthquake it is a percentage of the dwelling limit.
- Mandatory offer: a California rule that insurers must offer earthquake cover.
- CEA: the California Earthquake Authority.
- Retrofit: strengthening a home, such as bolting it to its foundation.
- Additional living expenses: cost of temporary housing while a home is unlivable.
Sources
- United Policyholders: Insurance Woes, Changes Underway for Earthquake Policies (15% minimum, $739 average)
- Hartford Business: 3 Reasons Why Californians Shun Quake Insurance (deductibles, reserve concerns)
- Old Harbor Insurance: Earthquake Insurance California Cost (exclusion, deductible example, living expenses)
- EarthquakeTracker: Earthquake Insurance in California (policy tiers, deductible table, $1,770 average)
- Insurance Journal: Twenty Years Later, Big Lesson From Northridge Quake Lost ($15.3 billion, take-up rate)
- California Earthquake Authority: CEA History (Northridge damage, 93% market restriction, two-thirds share)
- AIR Worldwide: Twenty Years After Northridge ($12.5 billion insured losses)
- Crescenta Valley Weekly: Considering Earthquake Insurance ($54,000 deductible example)
Related reading: Umbrella Insurance Explained · Yacht and Boat Insurance Explained · Collectibles Insurance Explained
Published October 2026. Prices and plan terms vary by insurer and change often; always read the deductible calculation and what the policy excludes, and refresh this article periodically.
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