Key Takeaways
- Standard homeowners insurance does not cover earthquake damage — you need a separate policy or endorsement.
- Earthquake insurance deductibles are percentage-based, typically ranging from 2% to 20% of your dwelling coverage limit — much higher than standard homeowners deductibles.
- The national average cost is approximately $800 per year, but premiums range from under $300 to over $3,000+ depending on location, building type, and risk factors.
- FEMA disaster assistance is limited — the maximum Individual Assistance grant is $43,600 for housing needs (as of FY2025), and the average payout has historically been around $4,200.
- Earthquake insurance covers your dwelling structure, personal property, and additional living expenses, but excludes vehicles, landscaping, pools, and flood damage.
Disclaimer: This article is for educational purposes only and does not constitute insurance advice. Coverage options, costs, and terms vary by provider and location. Consult a licensed insurance agent for personalized guidance.
What Is Earthquake Insurance?
Earthquake insurance is a specialized property insurance policy — or an endorsement added to an existing homeowners policy — that covers damage to your home, personal belongings, and living expenses resulting from seismic activity. It exists as a separate product because standard homeowners, renters, and condo insurance policies specifically exclude earthquake damage from their coverage.
This distinction catches many homeowners off guard. If an earthquake cracks your foundation, collapses a wall, or shifts your home off its footings, your regular homeowners policy will not pay for repairs. The only exception is if the earthquake causes a fire — fire damage is covered under standard homeowners policies in most states regardless of its cause.
Earthquake insurance can be purchased in several ways depending on your state and insurance provider. In some states, insurers offer earthquake coverage as an endorsement (an add-on) to your existing homeowners policy. In others — particularly California — earthquake insurance is typically sold as a standalone policy through specialized providers like the California Earthquake Authority (CEA).
What Earthquake Insurance Covers
Understanding what earthquake insurance does and does not cover is essential before purchasing a policy. Coverage generally falls into three main categories, though specific terms vary by insurer and state.
Coverage Basics
| Coverage Type | What It Pays For | Typical Limits |
|---|---|---|
| Dwelling (Coverage A) | Structural damage to your home — foundation, walls, roof, attached garage | Up to replacement cost of your home |
| Personal Property (Coverage C) | Furniture, electronics, clothing, appliances damaged by earthquake shaking | Varies by policy; CEA caps at $25,000 (as of 2023 policy changes) |
| Loss of Use (Coverage D) | Additional living expenses if your home is uninhabitable — hotel, rent, meals | Varies; CEA offers $1,500–$100,000 depending on policy type |
| Building Code Upgrade | Extra costs to bring a damaged home up to current building codes during repairs | Up to $30,000 (CEA) |
| Emergency Repairs | Immediate repairs to prevent further damage after an earthquake | Typically 5% of dwelling + personal property limits; CEA covers first $1,500 with no deductible |
What Earthquake Insurance Does NOT Cover
Earthquake insurance has significant exclusions that every policyholder should understand:
- Vehicles — Auto damage from earthquakes is covered under the comprehensive portion of your car insurance, not your earthquake policy.
- Flood or tsunami damage — Even if triggered by an earthquake, water damage from flooding or tsunamis requires separate flood insurance.
- Fire damage — Already covered under your standard homeowners policy, so earthquake insurance excludes it to avoid double coverage.
- Landscaping, pools, fences, and masonry walls — External features and yard improvements are typically excluded.
- Detached structures — Separate buildings like sheds, guest houses, or detached garages are usually not covered.
- Land damage — Sinkholes, erosion, or other ground-level changes from seismic activity are generally excluded, though some policies offer limited land stabilization coverage.
- Pre-existing damage — Damage that existed before the earthquake event is excluded.
How Earthquake Insurance Deductibles Work
This is where earthquake insurance differs most dramatically from other types of insurance — and where many policyholders experience sticker shock when filing a claim.
Percentage-Based Deductibles
Unlike your standard homeowners policy, which might carry a $1,000 or $2,500 flat deductible, earthquake insurance deductibles are calculated as a percentage of your dwelling coverage limit. These percentages typically range from 2% to 25%, with most policies in high-risk states carrying minimums of 10% to 15%.
Here's what that means in real dollar terms:
| Home Replacement Value | 5% Deductible | 10% Deductible | 15% Deductible | 20% Deductible |
|---|---|---|---|---|
| $300,000 | $15,000 | $30,000 | $45,000 | $60,000 |
| $500,000 | $25,000 | $50,000 | $75,000 | $100,000 |
| $750,000 | $37,500 | $75,000 | $112,500 | $150,000 |
| $1,000,000 | $50,000 | $100,000 | $150,000 | $200,000 |
This means that for a home insured at $500,000 with a 15% deductible, you would pay the first $75,000 out of pocket before your insurance begins to pay. The insurance company only covers damage that exceeds your deductible amount, up to your policy limit.
Why Deductibles Are So High
Insurance companies set high earthquake deductibles because seismic events tend to be catastrophic and correlated — when an earthquake strikes, it damages thousands of properties simultaneously in the same area. This is fundamentally different from, say, a house fire, which is typically an isolated event. The high deductibles help insurers manage their exposure to these large-scale, concentrated losses.
Choosing a Deductible
Selecting a higher deductible lowers your annual premium but increases your out-of-pocket costs when you file a claim. A lower deductible costs more each year but provides greater financial protection if damage occurs.
In high-risk states like California, Washington, and Nevada, the minimum available deductible is often 10% or higher. The California Earthquake Authority offers deductibles of 5%, 10%, 15%, 20%, and 25%, with certain restrictions — homes valued over $1 million or built before 1980 on a raised foundation (without verified seismic retrofitting) have a minimum deductible of 15%.
How Much Does Earthquake Insurance Cost?
Earthquake insurance costs vary enormously based on where you live, your home's characteristics, and the coverage options you choose.
National Averages
The national average for earthquake insurance is approximately $800 per year, according to industry data. However, this average obscures a very wide range. In lower-risk states like those in the Midwest or Southeast, annual premiums might run $200 to $500. In high-seismic-risk states like California, premiums for a $500,000 home typically range from $1,250 to $2,750 per year, and some high-risk locations can exceed $3,000 annually.
Cost Factors
Several factors determine your earthquake insurance premium:
| Factor | Impact on Premium |
|---|---|
| Location and seismic zone | Proximity to known fault lines is the single biggest cost driver. Homes within a few miles of active faults pay significantly more. |
| Soil type | Homes built on soft soils, fill, or liquefaction-prone areas face higher rates than those on bedrock. Sandy soils amplify shaking more than clay or rock. |
| Building age | Older homes, especially those built before modern seismic building codes (pre-1980 in many states), cost more to insure due to greater vulnerability. |
| Construction type | Wood-frame homes generally receive lower rates because they flex during shaking. Brick and unreinforced masonry buildings are more vulnerable and cost more. |
| Number of stories | Multi-story homes face higher premiums than single-story homes. |
| Foundation type | Homes on raised foundations without seismic retrofitting are riskier than slab-on-grade or retrofitted homes. |
| Replacement cost | Higher home values mean higher premiums since the insurer's potential payout is larger. |
| Deductible selected | Choosing a higher deductible percentage lowers your premium. |
| Retrofitting | Homes that have been seismically retrofitted may qualify for discounts of up to 25%. |
Average Costs by Risk Level
| Risk Level | Typical Annual Premium | Example Locations |
|---|---|---|
| Low Risk | $200–$500 | Midwest, Southeast, parts of Northeast |
| Moderate Risk | $500–$1,000 | Pacific Northwest interior, parts of Utah, Missouri |
| High Risk | $1,000–$2,000 | Most of California, Pacific Northwest coast |
| Very High Risk | $2,000–$5,000+ | Near-fault locations in California, parts of Alaska |
Who Needs Earthquake Insurance?
Nearly 75% of the United States faces some level of earthquake risk, according to the U.S. Geological Survey (USGS). But that doesn't mean everyone needs earthquake insurance. The decision depends on several personal and geographic factors.
You Should Strongly Consider It If:
- You live within 10–15 miles of a known active fault.
- Your home is your largest financial asset and you couldn't afford to rebuild without insurance.
- You live in a state with significant seismic risk — California, Washington, Oregon, Alaska, Hawaii, Utah, Nevada, Missouri, South Carolina, or Tennessee.
- You have a mortgage — while earthquake insurance typically isn't required by lenders, the financial exposure is enormous without it.
- Your home is older or built with unreinforced masonry.
It May Be Less Critical If:
- You live in a very low-seismic-risk area with no nearby fault lines.
- You rent and have minimal personal property at risk.
- You could comfortably absorb the cost of rebuilding or significant repairs.
- Your home is built to modern seismic codes on stable ground.
For a deeper analysis of whether earthquake insurance makes financial sense for your situation, see our guide: Is Earthquake Insurance Worth It?
Earthquake Insurance by State
Earthquake insurance availability and regulations vary significantly by state. Here's what you should know about the key markets.
California
California has the largest earthquake insurance market in the country. The California Earthquake Authority (CEA) provides approximately two-thirds of all residential earthquake policies in the state. Despite living in the most seismically active region of the contiguous United States, only about 10–13% of California homeowners carry earthquake insurance.
California law requires all homeowners insurance companies to offer earthquake coverage to their policyholders, either through the CEA or through private providers. Homeowners can also purchase standalone policies from private insurers like GeoVera, Palomar, and Arrowhead.
For a detailed breakdown of California-specific options, costs, and the CEA program, see: Earthquake Insurance in California
Washington and Oregon
The Pacific Northwest faces significant seismic risk from the Cascadia Subduction Zone, which is capable of producing magnitude 9.0+ earthquakes. Only about 11% of Washington residents carry earthquake insurance. Earthquake coverage in these states is typically offered as an endorsement to homeowners policies, with deductibles of 10–15% being common.
Central United States (New Madrid Zone)
The New Madrid Seismic Zone, centered around Missouri, Arkansas, Tennessee, Kentucky, and Illinois, has a 7–10% chance of producing a magnitude 7.5+ earthquake over the next 50 years, according to the USGS. Take-up rates in this region have declined sharply — Missouri went from about 60% coverage in 2000 to roughly 11% by 2021, largely due to rising premiums.
Other States
Most insurance companies offer earthquake endorsements in all 50 states. In lower-risk areas, premiums are considerably more affordable, and coverage can often be added for a few hundred dollars per year.
FEMA Assistance vs. Earthquake Insurance
Many homeowners assume that if a major earthquake strikes, the federal government will help them rebuild. While FEMA does provide disaster assistance, it is far more limited than most people realize.
What FEMA Actually Provides
FEMA's Individuals and Households Program (IHP) provides financial assistance after a presidentially declared disaster. As of the federal fiscal year beginning October 2024, the maximum IHP assistance is:
- $43,600 for housing assistance (home repairs, rental assistance, replacement)
- $43,600 for other needs (personal property, medical, dental, moving expenses)
- Total maximum: $87,200
However, the average FEMA grant has historically been about $4,200, according to Government Accountability Office data. This is a fraction of what most homeowners would need to rebuild after a serious earthquake.
Additionally, FEMA assistance is not guaranteed. Your area must receive a presidential disaster declaration before individual assistance becomes available, and not all earthquakes trigger such declarations.
The SBA Loan Option
For homeowners who exceed FEMA grant limits, the Small Business Administration (SBA) offers disaster loans of up to $500,000 for home repairs. These are loans — they must be repaid — which means you're taking on debt to rebuild your home. Interest rates for disaster loans are typically low (around 2.5–4%), but it's still a significant financial burden.
Insurance vs. FEMA: A Comparison
| Factor | Earthquake Insurance | FEMA Assistance |
|---|---|---|
| Maximum benefit | Up to full replacement cost | $43,600 for housing (max) |
| Average payout | Covers damage above deductible | ~$4,200 average grant |
| Guarantee | Contractual obligation | Requires disaster declaration |
| Speed | Claim process; typically weeks | Can take weeks to months |
| Repayment | No repayment (it's insurance) | Grants: no repayment. SBA loans: must repay |
| Availability | Always available if you have a policy | Only after presidential declaration |
For more information on FEMA disaster programs, visit: FEMA Earthquake Insurance Resources
How to Buy Earthquake Insurance
The process for purchasing earthquake insurance depends on your state and the type of coverage you want.
Step 1: Check with Your Current Homeowners Insurer
Start by contacting your existing homeowners insurance company. Many insurers offer earthquake coverage as an endorsement to your current policy. In California, your insurer is legally required to offer you earthquake coverage.
Step 2: Get Quotes from Multiple Providers
Don't settle for the first quote. Earthquake insurance rates can vary dramatically between providers. In California, for example, rates range from as little as $0.10 per $1,000 of coverage to as much as $15 per $1,000, depending on the insurer and your home's risk profile.
Step 3: Compare Coverage, Not Just Price
Look beyond the premium amount. Compare deductibles, coverage limits, exclusions, and additional endorsements. A cheaper policy with a 20% deductible might cost less annually but leave you responsible for a much larger portion of damage costs than a slightly more expensive policy with a 10% deductible.
Step 4: Consider Retrofitting First
If you own an older home, investing in a seismic retrofit before purchasing insurance can lower your premiums. The CEA offers premium discounts of up to 25% for properly retrofitted homes. Retrofitting costs typically range from $3,500 to $8,700, and various grant programs may help offset these costs.
Learn more about seismic retrofitting: Earthquake Retrofitting Guide
Step 5: Review Your Policy Annually
Rebuilding costs change over time, and your coverage should keep pace. Review your earthquake insurance policy annually to ensure your dwelling coverage limit reflects the current cost to rebuild your home — not its market value.
Reducing Your Earthquake Risk
Whether or not you purchase earthquake insurance, there are practical steps you can take to reduce your vulnerability to earthquake damage.
- Retrofit your home — Bolt your home to its foundation and brace cripple walls if you have an older home on a raised foundation. Learn about retrofitting options
- Secure heavy items — Strap water heaters, anchor tall furniture, and secure heavy objects that could fall or shift during shaking.
- Know your risk — Understand the seismic hazards in your area, including nearby fault lines and soil conditions. Explore fault lines near you
- Create an emergency plan — Have supplies, important documents, and a family communication plan ready. Earthquake preparedness guide
- Maintain your home — Fix existing structural issues like cracked foundations or deteriorating mortar, which can worsen dramatically during an earthquake.
Sources
- Federal Emergency Management Agency (FEMA). "Earthquake Insurance." fema.gov/earthquake/insurance
- Insurance Information Institute (III). "Background on: Earthquake Insurance and Risk." iii.org
- California Earthquake Authority (CEA). "Homeowners Coverage Options." earthquakeauthority.com
- California Department of Insurance. "Earthquake Insurance." insurance.ca.gov
- National Association of Insurance Commissioners (NAIC). "Earthquake Insurance." naic.org
- U.S. Geological Survey (USGS). "Earthquake Hazards Program." usgs.gov
- Federal Register. "Notice of Maximum Amount of Assistance Under the Individuals and Households Program." October 2024. federalregister.gov