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How Much Is Earthquake Insurance?

Talking about insurance isn’t all that exciting. We get it. But do you know what’s worse? A fat stack of bills after an unexpected emergency—like an earthquake!

Depending on the size of the quake, the damage can range from a small crack in the wall to an unplanned home demolition. That means a strong earthquake could demolish your bank account. And even though earthquakes can be just as destructive as a tornado or a fire, they’re not covered by standard homeowners insurance.

And if you think you can skip out on earthquake insurance because you don’t live in California, think again. The National Earthquake Information Center detects roughly 50 earthquakes each day; on a yearly basis, the average number totals to 20,000.1 Yikes!

So, should you rush out right now and purchase earthquake insurance? Nope, not yet. In this article, we’ll talk about how much earthquake insurance costs, what exactly it covers, and if it makes sense for you.

What Is Earthquake Insurance?

Earthquake insurance reimburses you for repair costs and/or replacement costs if your home or personal property is damaged in an earthquake. It will also reimburse you for temporary living arrangement costs if your home is destroyed. After all, isn’t the home loss bad enough without having to hole up with relatives in the meantime? A hotel sounds much nicer while you wait for renovations.

If you’re looking for even more information, don’t worry—we put together a complete guide to earthquake insurance.

What Does Earthquake Insurance Cover?

If an earthquake strikes and your home is damaged, your insurance policy would pay for:

  • Dwelling coverage: repairs to your home and extended structures, like a garage or a pool
  • Personal property coverage: reimbursement for your belongings, including clothes and furniture
  • Loss of use coverage: additional living expenses you may need, like hotel bills and dining costs, if your home is unlivable

There is a predetermined limit on what earthquake insurance pays for, so while the coverage will help put a roof back over your head, it probably won’t be enough to restore your entire home and belongings to their former glory.

It’s worth noting that earthquake insurance wouldn’t cover other natural disasters caused by an earthquake—like flooding or sinkholes. You’d likely need to purchase a separate policy for these disasters even if they were the result of an earthquake.

But if the quake caused a fire, your homeowners insurance would cover that. And auto insurance would likely cover any damage done to your vehicle.

What Factors Affect Earthquake Insurance Costs?

How much does earthquake insurance cost? Well, it depends.

The exact price will depend on your coverage limits, deductibles and lots of other factors, including:

  • Your ZIP code. If you live in an area that’s prone to severe earthquake damage, your insurance rates will be higher. (Duh!)
  • The age of your home. Newer homes usually have better materials and can be designed with earthquakes in mind, so they typically cost less to insure than older homes.
  • The number of stories. Taller homes have a greater chance of falling over in an earthquake, so they're typically more expensive to insure. (Can you imagine the premiums on the Leaning Tower of Pisa?)
  • Rebuilding costs. If your home is expensive and would be costly to rebuild, your earthquake insurance rates will most likely be costly too.
  • Soil type. Soft, sandy soil is more likely to amplify earthquake waves than clay or rock. So, if your home sits on soft soil, chances are it’ll take more damage during an earthquake.
  • Foundation materials. Raised foundations are more adaptable to changes in the earth, which is super important during an earthquake. This is called elasticity.
  • The building materials used in your home. Homes with wood frames usually cost less to insure because wood is more elastic than other building materials.

You can probably tell by these examples that earthquake insurance rates (and any insurance rates for that matter) are mainly determined by risk.

Protect your home and your budget with the right coverage!

If the insurance company thinks that the risk to insure your home is high, your monthly premium will be on the high side too. And if the risk is low? You guessed it—your premium will be on the low side.

We can’t give you exact numbers for how much your earthquake insurance will cost. But we can encourage you to connect with one of our Endorsed Local Providers (ELPs) who will be able to give you exact figures and clearly explain the factors that determine your rate. (These people nerd out with math!)

Earthquake Insurance Rates in California by City

We’ll give it to you straight—if you live somewhere that can get a little shaky, like California, earthquake insurance is probably going to be expensive. The higher the risk of earthquakes in your neighborhood, the higher you’ll pay out of pocket.

California has more earthquakes that cause damage than any other state.2 In fact, earthquake damage is so frequent in California that the state has its own rules and its own earthquake insurance marketplace.  

First, the rules. Insurance companies that offer homeowners insurance to their California customers also have to offer an earthquake insurance add-on in writing. Policyholders have 30 days to accept the offer. If they don’t, the offer is considered rejected.

Now, about that marketplace—it’s called the California Earthquake Authority (CEA). The CEA is the United States’ largest provider of residential earthquake insurance, with over 1 million policyholders.3

You can think of it as California’s financial shock absorber. And policyholders have to buy their CEA insurance policy from the same insurance company that provides their homeowners policy.

Back to the California quakes themselves. The probability of a magnitude 6.7 earthquake in the Los Angeles area in the next 30 years is 60%.4 And the probability of a magnitude 6.7 earthquake in the San Francisco Bay area in the next 30 years is a whopping 72%!5

Other areas in California aren’t quite as shaky (or populated) as the Los Angeles and the San Francisco Bay areas, but they’re still more vulnerable than other parts of the country. If you live in California and you’re curious about earthquake activity in your area, the CEA has a handy tool that lets you see earthquake risk and fault activity in your county.

So, if you live anywhere in California, you should at least look into your earthquake insurance options.

Do You Have the Right Insurance?

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Earthquake Insurance and Deductibles

Pay special attention to earthquake insurance deductibles. No matter where you live in the U.S., earthquake insurance deductibles are usually higher than those in standard homeowners or renters insurance policies. And if you live in a city near an active fault, your deductible will be even higher.

Not only are earthquake insurance deductibles higher, but they’re also calculated differently than most insurance policy deductibles. Instead of you getting to choose your own deductible amount, earthquake insurance deductibles are determined as a percentage of your policy limits.

For example, let’s say your earthquake insurance policy says your dwelling coverage is $300,000 (with a 10% deductible) and your personal property coverage is $100,000 (with a 2% deductible).

Using those same figures, the table below shows sample damage amounts, exactly how much you would pay out of pocket, and how much your insurer would pay.


Dwelling coverage

Personal property coverage


Coverage limits












Amount you’re responsible for




Amount insurer is responsible for




There’s more. Earthquake insurance carriers usually make you pay separate deductibles for the dwelling and personal property portions of your policy. So, in the example above, you’d end up paying a $32,000 deductible out of your own pocket—$30,000 for your dwelling plus $2,000 for your stuff.

Is Earthquake Insurance Worth It?

The answer really boils down to three questions:

1. How likely is it that an earthquake will happen in your area?

No one can predict the future, but there are some smart ways to at least estimate the likelihood of a damaging earthquake in your area.

We found two tools that will help. The first one is an interactive fault map provided by the U.S. Geological Survey. It shows seismic activity in each region of the United States.

The second way to estimate the possibility of a major earthquake in your area is by using one of FEMA’s hazard maps. The maps show the odds of an earthquake in your neighborhood and how intense it would be.

2. How likely is it that an earthquake would cause damage to your home?

There’s not a hard-and-fast rule about what earthquake magnitude is the most likely to damage your home. That said, the general rule of thumb is that damage usually doesn’t occur until the magnitude reaches somewhere above a 4 or a 5.

Instead of random guesswork, though, the best way to measure the likelihood of earthquake damage to your home is to consider the same factors that insurance companies use to determine your premium.

3. Would you be able to afford to repair or replace your home after an earthquake without the help of insurance?

This last question carries the most weight. Of course, we don’t want you to lose your home. But in the event of a destructive earthquake, we definitely don’t want you to lose your nest egg either.

Ask yourself: How much would it cost to repair or rebuild my home without insurance, and how would I pay for it? Remember that even if your home is destroyed by an earthquake, you still have to continue making mortgage payments if you haven’t already paid it off.

To give you a more details so you can answer the question, “Do I need earthquake insurance?” we wrote a separate blog post here.

How Much Earthquake Insurance Should I Buy?

You should buy enough earthquake insurance to cover the cost of rebuilding your home and replacing your belongings. But just like any rule, there are exceptions here. In general, the strategy that makes the most financial sense is to protect your assets in case of a potential emergency.

Keep in mind that we’re talking about actual construction and repurchasing costs. That means you need to figure out the amount of money needed to rebuild your home and repurchase your possessions.

The best way to determine the true construction cost of rebuilding your home is to find the average rebuilding cost per square foot for your area and multiply that number by your home’s overall square footage. For example, if the average rebuilding cost per square foot in your area is $100 and your home is 2000 square feet, the cost to rebuild your home would be $200,000.

To estimate the cost of replacing your personal belongings, you can either ask your insurance agent or hire an appraiser. Either way, they’ll be able to give you accurate estimates.

How to Save on Earthquake Insurance

If you’ve made the decision to buy earthquake insurance and you’re concerned about cost, don’t worry—there are some smart ways to lower your premium.


This has nothing to do with vintage décor, by the way. Most earthquake insurance carriers offer a discount for retrofitting your home. If you spend the time and the money needed to strengthen your home to withstand an earthquake, insurance companies will usually offer some kind of price cut.

Compare Rates

Another way to save money on your earthquake insurance is to get multiple quotes and look at not only the cost, but also the reason why premiums differ from one insurance company to another.

We know this kind of detective work can be a pain. So, we recommend working with a pro like one of our Endorsed Local Providers (ELPs) who can do the detective work for you. They’ll shop around for you to find the best coverage at the best price so you can spend your time doing something more enjoyable than comparing insurance rates.

Find an insurance ELP today!

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