California Earthquake Insurance Claims

Earthquake Insurance in California: What You Need to Know

Standard California homeowners insurance policies explicitly exclude earthquake damage. This means if an earthquake damages your home, your regular homeowners policy will not pay for repairs unless you have purchased separate earthquake coverage.

Most California earthquake policies are issued through the California Earthquake Authority (CEA), a publicly managed, privately funded organization. Some private insurers also offer earthquake coverage, though terms and pricing vary significantly.

California Earthquake Authority (CEA)

The CEA is a not-for-profit, publicly managed organization that provides residential earthquake insurance to California homeowners. Created in 1996 after the Northridge earthquake devastated Southern California, the CEA offers three policy options:

Homeowners Choice: Basic coverage for dwelling, personal property, and loss of use
Homeowners Premium: Enhanced coverage with higher limits and broader protection
Renters: Coverage for personal property and loss of use for renters

Understanding CEA Coverage

CEA policies differ significantly from your standard homeowners insurance. Understanding what is and is not covered will help you set realistic expectations and prepare for a claim.

What CEA Policies Cover

Dwelling Coverage

Structural damage to your home, including foundation, walls, roof, and attached structures like garages.

Personal Property

Damage to your belongings inside the home. Subject to sublimits and exclusions for certain items.

Loss of Use

Additional living expenses if your home becomes uninhabitable after an earthquake.

Emergency Repairs

Costs to make temporary repairs that prevent further damage, such as tarping a damaged roof.

What CEA Policies Do NOT Cover

Detached structures: Separate garages, sheds, and fences are not covered by standard CEA policies
Pools and spas: Swimming pools, hot tubs, and their equipment are excluded
Landscaping: Damage to trees, plants, lawns, and hardscape is not covered
Masonry fences and walls: Standalone brick or stone walls are excluded
Driveways and walkways: Exterior concrete work is generally not covered
Fire following earthquake: This is covered by your homeowners policy, not the CEA policy

Critical Exclusion: Fire After Earthquake

If an earthquake causes a fire that damages your home, the fire damage is covered by your homeowners policy, not your earthquake policy. This is an important distinction because your homeowners deductible (usually much lower) applies to fire claims.

Document whether damage was caused by shaking or fire separately
You may need to file two claims: one with CEA (shaking) and one with your homeowners insurer (fire)
Insurers sometimes dispute whether damage was from shaking or subsequent fire

CEA Deductibles: The Biggest Surprise

CEA earthquake policies have percentage-based deductibles that are much higher than typical homeowners insurance deductibles. These deductibles are calculated as a percentage of your dwelling coverage limit, not the amount of your claim.

Deductible Option	Dwelling Value: $500,000	Dwelling Value: $800,000
5% Deductible	$25,000 out of pocket	$40,000 out of pocket
10% Deductible	$50,000 out of pocket	$80,000 out of pocket
15% Deductible	$75,000 out of pocket	$120,000 out of pocket
20% Deductible	$100,000 out of pocket	$160,000 out of pocket
25% Deductible	$125,000 out of pocket	$200,000 out of pocket

Pro Tip: Know Your Deductible Before Disaster Strikes

Many California homeowners are shocked to discover their earthquake deductible after an earthquake. Review your policy now and understand exactly what you would pay out of pocket. If your deductible is unaffordable, consider adjusting your coverage while you can - you cannot change your policy after an earthquake occurs.

Filing a CEA Earthquake Claim

When an earthquake strikes, acting quickly and methodically will help protect your claim. Here is what you need to do:

Immediate Steps After an Earthquake

Ensure safety first: Check for gas leaks, structural damage, and hazards before entering your home
Document everything: Take extensive photos and videos of all damage before cleanup begins
Prevent further damage: Make temporary repairs to prevent additional loss (cover openings, shut off water)
Keep receipts: Save all receipts for emergency repairs, temporary housing, and additional expenses
File your claim promptly: Contact your insurance company as soon as possible

The Claim Process

Report the claim: Contact CEA or your insurance company to report damage
Adjuster inspection: An adjuster will inspect your property to assess damage
Get your own estimates: Obtain independent contractor estimates for comparison
Submit proof of loss: Complete and submit all required claim documentation
Negotiate if needed: If the initial offer seems low, provide documentation supporting a higher payout

California Claim Deadlines

California law requires insurers to respond to your claim within specific timeframes:

15 days: Insurer must acknowledge receipt of your claim
40 days: Insurer must accept or deny your claim (subject to extension)
30 days: Undisputed amounts must be paid after proof of loss

After a major earthquake, the California Insurance Commissioner may issue emergency regulations extending these deadlines due to the volume of claims.

Common CEA Claim Disputes

Earthquake claims frequently result in disputes. Understanding common issues can help you prepare and protect your interests.

Pre-Existing Damage

Insurers often argue that cracks and other damage existed before the earthquake. To counter this:

Document your home's condition before an earthquake (annual photos/videos)
Keep records of prior inspections and maintenance
If damage is clearly earthquake-related (pattern of cracks, foundation shift), push back

Settlement Amount Disputes

The insurer's estimate may be lower than actual repair costs:

Get multiple contractor estimates from licensed earthquake repair specialists
Request itemized breakdowns from the adjuster
Challenge unrealistic labor rates or repair timelines
Consider hiring a public adjuster for large claims

Coverage Interpretation

Disputes about what is covered often arise:

Is the structure "attached" (covered) or "detached" (not covered)?
Was damage caused by earthquake shaking or subsequent fire/flood?
Do cosmetic repairs qualify as necessary structural repairs?

Watch Out For: Depreciation Games

Some insurers try to apply excessive depreciation to earthquake claims, arguing that damaged components were old and would need replacement anyway. California law requires insurers to pay the actual cost of repairs without unfair depreciation deductions.

Private Earthquake Insurance Alternatives

While CEA is the dominant earthquake insurer in California, several private insurers offer earthquake coverage that may provide:

Lower deductibles (as low as 2.5% with some carriers)
Broader coverage for detached structures, pools, and landscaping
Different coverage limits and options
Potentially lower premiums in some areas

If you are shopping for earthquake coverage, compare CEA policies with private alternatives. Work with an independent insurance broker who can show you options from multiple carriers.

What If You Do Not Have Earthquake Insurance?

If an earthquake damages your uninsured home, your options are limited but not nonexistent:

FEMA assistance: After a Presidential Disaster Declaration, you may qualify for federal grants and low-interest loans
SBA disaster loans: The Small Business Administration offers disaster loans to homeowners regardless of business ownership
State programs: California may offer additional assistance programs after major earthquakes
Tax deductions: Uninsured casualty losses may be deductible if you itemize

Pro Tip: Do Not Wait to Buy Coverage

After an earthquake or earthquake swarm, insurers typically impose moratoriums and stop selling new earthquake policies for days or weeks. If you live in a seismically active area, buy coverage now while it is available. Waiting until "the big one" is too late.