Should you buy it? The honest math
Earthquake insurance is expensive with a huge deductible — and 87% of Californians skip it. The case for buying: could you absorb both the deductible AND continue paying the mortgage on a destroyed home while rebuilding? The case against: premiums near faults can run 1%+ of home value annually. It's a solvency decision, not a value decision.
- • In California, the CEA is the dominant writer, sold through your home insurer.
- • Loss-of-use limits are separate from the dwelling deductible.
- • Newer, bolted, wood-frame homes get the best rates — sometimes half of older stock.
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Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How much does earthquake insurance cost?
In California, roughly $800–2,500/year for a $500–700K wood-frame home away from major faults, and $3,000–8,000+ near them. Masonry construction costs about 50% more. Deductibles of 15–25% of dwelling value are standard.
Does homeowners insurance cover earthquakes?
No. Earth movement is excluded from every standard homeowners policy. In California, insurers must offer earthquake coverage (usually via the CEA), but you have to accept it. Fire that follows an earthquake IS covered by your homeowners policy.
What does the percentage deductible mean?
A 15% deductible on $600K of dwelling coverage means you pay the first $90,000 of damage. The policy only pays above that — which is why it's really insurance against losing the house entirely, not against moderate damage.
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