Insuring Against Earthquake and Tsunami Damage in California
Earthquake insurance
IF YOU OWN your home, it is probably your biggest single asset. In seconds, an earthquake can cause major damage to both the structure and its contents. Following the steps in this handbook will help to protect your family from injuries and reduce your losses, but you may still have some level of damage and will need to repair or replace belongings. One option for managing these potential costs is to buy earthquake insurance.
Most standard homeowners’, mobile homeowners’, condominium, and renters’ insurance policies do not cover earthquake damage; it is generally a separate policy you can purchase when buying homeowners insurance. All insurance companies that sell residential property insurance in California are required by law to offer earthquake insurance to homeowners when the policy is first sold and every two years thereafter.
Most of the companies that sell residential property insurance in California participate in the California Earthquake Authority (CEA) and offer CEA’s residential earthquake policies. The cost of the earthquake policy is based on a number of factors including location, age, construction type and home value.
CEA policies cover a policyholder’s dwelling, while excluding coverage for nonessential items such as swimming pools, patios, and detached structures. The insured value of your home is the same as the amount of coverage specified in your homeowners insurance policy. CEA policies provide:
- Home repair or replacement
- Additional living expenses
- Replace personal property
- Emergency repairs
- Building code upgrades
- Land—costs to replace, stabilize or restore the land that supports the home
Optional coverage is available to lower the deductible, increase personal property coverage, increase additional living expenses, and increase building code and land upgrades. You may purchase a CEA policy only through the CEA’s participating insurers. A complete list is on the CEA web site at earthquakeauthority.com which has an online premium calculator.
Tsunami Flood Insurance
Flood insurance is not included on homeowner’s policies and cannot be purchased through residential insurance companies. A separate flood insurance policy issued through the National Flood Insurance Program (NFIP) covers damages due to tsunamis as well as other flooding events and includes:
- Losses that result from flood-related erosion
- Damage due to mudflows if caused by flooding
- Flood damage to the building itself— foundation elements, posts, pilings, piers or other support systems in elevated buildings
Flood insurance does not cover buildings that are entirely over water (like a boat house), and structures other than buildings (like fences, retaining walls, swimming pools, walkways, decks, driveways, etc.)
Find out more about flood insurance at www.fema.gov/flood-insurance.