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An earthquake swept through California’s San Francisco Bay Area yesterday, and scientists say that more could impact the state, potentially with greater severity.
Homeowners may be surprised to learn that standard homeowners insurance typically doesn’t cover earthquake damage. Here’s how you can protect your home.
Ongoing Seismic Activity
A 4.3 magnitude earthquake, centered in Berkeley, shook the Bay Area Monday morning. It was the most powerful earthquake in the region in the past three years, according to the Los Angeles Times.
Scientists warn that California, which sits on the San Andreas Fault system, is prone to seismic activity and may be due for an earthquake of more severe magnitude in the coming years.
The U.S. Geological Survey (USGS) reports a 60% chance that a 6.7 magnitude earthquake will hit Los Angeles within the next 30 years. To put that in perspective, the agency categorizes a 6.3 magnitude earthquake as “strong.”
The USGS also estimates a 46% chance of a magnitude 7.0 earthquake and a 31% chance of a 7.5 magnitude event hitting Los Angeles within the same timeframe.
The odds are similar for San Francisco. The USGS projects a 72% chance of a magnitude 6.7 quake, a 51% chance of a 7.0 and a 20% chance of a 7.5 magnitude earthquake striking the city.
Each whole number increase in magnitude represents a tenfold increase in the amplitude measured on a seismogram, according to the USGS. Michigan Tech’s Earthquake Magnitude Scale categorizes a 7.0 to 7.9 magnitude earthquake as “major,” capable of causing serious damage to structures and buildings.
Are You Covered?
Homeowners may be shocked to learn that while homeowners insurance policies cover a wide range of events, earthquakes aren’t usually one of them. Similar to flood insurance, earthquake coverage must be purchased separately, or else you risk paying out of pocket for damage to your home and belongings.
According to the USGS, the 10 states most prone to earthquakes are:
- California
- Washington
- Utah
- Tennessee
- Oregon
- South Carolina
- Nevada
- Arkansas
- Missouri
- Illinois
Keep in mind that if you’re in the market for earthquake insurance, most insurers won’t sell policies if there has been an earthquake in the last 30 to 60 days. If you’re in California, that means you’ll need to wait during a cool-off period before applying.
The California Earthquake Authority (CEA) provides the majority of residential earthquake insurance in the state. While residents and homeowners can’t buy a policy directly from the agency, they can purchase one through insurance companies that are CEA members.
You must have a residential property insurance policy to buy a CEA policy, and you must purchase your CEA policy from the same insurance company that issued your home insurance policy.
Even without earthquake coverage, California law requires homeowners and renters insurance to cover any fire damage that results from an earthquake.
While the average cost for earthquake insurance clocks in at $850 per year, according to AAA, the cost of earthquake damage is significantly higher.
According to HomeAdvisor, earthquake damage repairs can range from $5,000 to $25,000 for most homeowners, with a national average of $15,000. The more severe the earthquake, the more costly the repairs, which can easily exceed $30,000.
If you’re in California, use the California Earthquake Authority premium calculator to see how much a policy could cost.
When shopping around for policies, keep in mind the policy’s deductible—or what you’ll pay out of pocket if you file a claim. If you choose a policy with a higher deductible, you’ll pay a lower premium. But do the math: 25% of a $100,000 policy limit means you’ll pay the first $25,000 if you file a claim.