Key Takeaways
- The California Earthquake Authority (CEA) is a publicly managed, not-for-profit entity that provides approximately two-thirds of all residential earthquake insurance in California. It is one of the largest earthquake insurance providers in the world.
- Only about 10–13% of California homeowners carry earthquake insurance, despite the state experiencing roughly two-thirds of all U.S. earthquake risk.
- Average annual premiums for a $500,000 home in California range from approximately $1,250 to $2,750, though costs can fall below $500 in lower-risk areas and exceed $3,000 near active faults.
- CEA deductibles range from 5% to 25%, but homes valued over $1 million or pre-1980 homes on raised foundations without verified retrofitting have a minimum deductible of 15%.
- The CEA implemented a 6.8% rate increase effective January 1, 2025, adding an average of about $70 per year for homeowners.
- Private insurers like GeoVera, Palomar, and Arrowhead offer alternative earthquake policies that may provide different coverage terms, lower deductibles, or competitive rates.
Disclaimer: This article is for educational purposes only and does not constitute insurance advice. Policy terms, coverage options, and premiums change frequently. Consult a licensed insurance agent for personalized quotes and guidance.
California's Earthquake Risk
California sits along some of the most seismically active fault systems in the world. The state has roughly two-thirds of the nation's earthquake risk, and the U.S. Geological Survey (USGS) estimates a 99% probability that California will experience at least one earthquake of magnitude 6.7 or greater in the coming decades. Most Californians live within 30 miles of an active fault, and the state has nearly 16,000 known faults.
The 1994 Northridge earthquake — a magnitude 6.7 event in the San Fernando Valley — caused an estimated $33 billion in insured losses (in 2024 dollars). Insurers paid out more in claims from that single earthquake than they had collected in earthquake premiums over the previous 30 years. The aftermath nearly drove several insurers out of business and created a crisis in the state's homeowners insurance market.
That crisis led directly to the creation of the California Earthquake Authority in 1996.
Major fault systems that pose risk to California residents include the San Andreas Fault, the Hayward Fault, the San Jacinto Fault, the Cascadia Subduction Zone (Northern California), and numerous smaller faults throughout the state.
What Is the California Earthquake Authority (CEA)?
The California Earthquake Authority is a publicly managed, privately funded, not-for-profit organization created by the California Legislature in 1996. It was established specifically to ensure that earthquake insurance remained available and affordable for California residents after the Northridge earthquake destabilized the private market.
How the CEA Works
The CEA does not sell insurance directly to consumers. Instead, it operates through a network of over 20 participating residential insurance companies. To purchase a CEA policy, you must have a homeowners, renters, or condo policy with one of these participating insurers and buy your CEA earthquake policy through the same company.
Key facts about the CEA:
- It provides roughly two-thirds of all residential earthquake policies sold in California.
- It had approximately 1.1 million policies in force as of its most recent reporting.
- Its claim-paying capacity exceeds $18 billion.
- Its rates are based on seismic science, not profit margins.
- It is regulated by the California Department of Insurance.
CEA Policy Types
The CEA offers earthquake insurance for four types of residential policyholders:
| Policy Type | Who It's For | Dwelling Coverage | Personal Property | Loss of Use |
|---|---|---|---|---|
| Homeowners | People who own and live in a house | Up to replacement cost | Up to $25,000 | Up to $100,000 |
| Renters | People who rent their home | N/A (structure is landlord's) | Up to $5,000 | Up to $15,000 |
| Condo Unit Owners | People who own a condo | Up to $25,000 for interior unit improvements | Up to $25,000 | Up to $100,000 |
| Mobilehome Owners | People who own a mobile/manufactured home | Up to replacement cost | Up to $5,000 | Up to $15,000 |
CEA Coverage Options in Detail
The CEA offers two tiers of homeowners earthquake insurance: the Standard Homeowners policy and the Homeowners Choice policy. Understanding the difference is important for selecting the right coverage.
Standard Homeowners Policy
The Standard Homeowners policy bundles dwelling coverage, personal property coverage, and loss of use coverage into a single package with a single deductible. The personal property deductible is waived if covered dwelling damage exceeds the dwelling deductible — meaning you pay only one deductible, not two.
Homeowners Choice Policy
The Homeowners Choice policy allows you to customize your coverage more granularly. You can select dwelling coverage alone, without personal property or loss of use coverage. You can also choose separate deductible percentages for dwelling and personal property. This option tends to be cheaper but provides less comprehensive protection.
CEA Deductible Options
| Deductible Percentage | Deductible on $300K Home | Deductible on $500K Home | Deductible on $750K Home |
|---|---|---|---|
| 5% | $15,000 | $25,000 | $37,500 |
| 10% | $30,000 | $50,000 | $75,000 |
| 15% | $45,000 | $75,000 | $112,500 |
| 20% | $60,000 | $100,000 | $150,000 |
| 25% | $75,000 | $125,000 | $187,500 |
Important restrictions (effective for policies written on or after August 1, 2023):
- Homes valued over $1 million have a minimum deductible of 15%.
- Homes built before 1980 on a raised or non-slab foundation without verified seismic retrofitting also have a minimum deductible of 15%.
- Personal property coverage is capped at $25,000 (reduced from the previous $200,000 maximum).
- The breakables endorsement has been eliminated, though as of 2025, all policies with personal property coverage include a $500 sub-limit for certain breakable items at no additional cost.
Additional CEA Coverage Options
Beyond the core dwelling, personal property, and loss of use coverages, CEA policies include or offer:
- Building code upgrade coverage — up to $30,000 to bring a damaged home up to current building codes during reconstruction.
- Emergency repairs — the first $1,500 in emergency repairs to prevent further damage is covered with no deductible.
- Loss assessment coverage (condos) — up to $100,000 if your HOA levies an assessment for earthquake damage to common areas.
How Much Does Earthquake Insurance Cost in California?
California earthquake insurance is among the most expensive in the nation, reflecting the state's high seismic risk. However, costs vary dramatically based on your specific location, home characteristics, and the coverage options you select.
Average Premiums
For a single-family home with a $500,000 replacement cost, average earthquake insurance premiums in California are approximately $1,770 per year based on 2024 rate data from the California Department of Insurance. However, actual premiums can range from under $500 in lower-risk areas to over $3,000 in neighborhoods near active faults.
Average Cost by California Region
| Region | Approximate Annual Premium ($500K Home) | Risk Level |
|---|---|---|
| San Francisco Bay Area (inland, stable soil) | $800–$1,500 | Moderate–High |
| San Francisco Bay Area (near Hayward Fault) | $1,500–$3,000 | Very High |
| Los Angeles Basin | $1,200–$2,500 | High |
| Northern San Fernando Valley / Santa Clarita | $2,000–$3,500+ | Very High |
| San Diego County | $800–$1,500 | Moderate–High |
| Sacramento / Central Valley | $500–$1,000 | Moderate |
| Fremont / East Bay (parts) | $400–$900 | Moderate |
| Riverside / San Bernardino (near San Andreas) | $1,500–$3,000 | Very High |
| Central Coast (San Luis Obispo, Santa Barbara) | $1,000–$2,000 | High |
| Far Northern California (Redding, Eureka) | $600–$1,200 | Moderate–High |
Note: These are approximate ranges based on 2024 rate data and general regional risk levels. Actual premiums depend on your specific address, home characteristics, chosen deductible, and insurer. Use the CEA premium calculator for a personalized estimate.
2025 Rate Changes
Effective January 1, 2025, the CEA implemented a 6.8% rate increase across all policy types. The average impact is approximately:
- $70 per year for homeowners
- Less than $10 per year for renters
Individual policyholders may see increases above or below these averages depending on their location and coverage selections.
Factors That Affect Your California Premium
Your CEA premium is determined by a combination of risk factors tied to your specific property:
- Seismic zone and fault proximity — The single most significant factor. Properties near the San Andreas, Hayward, or other major faults pay substantially more.
- Soil conditions — Homes on soft soils or fill are more vulnerable to shaking amplification and liquefaction than homes on bedrock.
- Year built — Older homes, especially those built before seismic code updates, are more expensive to insure.
- Construction type — Wood-frame homes generally get better rates than brick, masonry, or concrete block homes.
- Foundation type — Slab-on-grade foundations are generally cheaper to insure than raised (crawl space) foundations.
- Roof type — Heavier roof materials (tile, slate, solar shingles) cost more than lighter materials (composition shingles).
- Number of stories — More stories mean higher premiums.
- Coverage selections — Your deductible percentage, personal property limits, and loss of use coverage all affect your premium.
- Seismic retrofitting — CEA offers premium discounts of up to 25% for older homes that have been properly retrofitted. Learn about earthquake retrofitting
Why Do So Few Californians Have Earthquake Insurance?
Despite living in one of the most seismically active regions in the world, only about 10–13% of California homeowners carry earthquake insurance. According to FEMA, this means roughly 90% of California residents are uninsured against earthquake damage.
Several factors contribute to this low take-up rate:
High premiums and deductibles — Many homeowners look at the cost of premiums and the size of percentage-based deductibles and conclude the value proposition is poor. A homeowner with a $500,000 home and a 15% deductible would pay the first $75,000 out of pocket before the policy pays anything.
Recency bias — California has not experienced a major, widely destructive earthquake since Northridge in 1994. As the memory of that event fades, many homeowners underestimate their risk or simply don't think about earthquake preparedness.
Assumption of government assistance — Many people incorrectly assume FEMA will cover the cost of rebuilding their home. In reality, FEMA's maximum individual housing assistance is $43,600, and the average grant has been roughly $4,200.
Limited personal property coverage — The 2023 reduction in CEA personal property coverage from $200,000 to $25,000 made the standard policy less attractive to some homeowners.
Cost of housing — In many California markets, home prices are extremely high, which makes earthquake insurance premiums correspondingly expensive. Homeowners already stretching to afford their mortgage may view earthquake insurance as an unaffordable extra expense.
For an in-depth analysis of whether earthquake insurance is worth the cost, see: Is Earthquake Insurance Worth It?
Alternative Earthquake Insurance Providers in California
While the CEA provides the majority of residential earthquake policies in California, it is not the only option. Several private insurers offer earthquake coverage with different terms, and in some cases, broader coverage or lower deductibles.
Private Insurance Alternatives
| Provider | Key Features |
|---|---|
| GeoVera (Quake Insurance) | Standalone earthquake policies; various deductible options; available in CA, OR, and WA; rated "A" (Excellent) by AM Best |
| Palomar | Innovative coverage options; may offer different deductible structures; serves both residential and commercial markets |
| Arrowhead | Standalone earthquake policies; offers a range of deductible options; partners with multiple carriers |
| Jumpstart | Parametric earthquake insurance — pays a flat amount (up to $10,000) based on earthquake magnitude and your location, regardless of actual damage; designed to supplement other coverage |
CEA vs. Private Insurers: Key Differences
| Feature | CEA | Private Insurers |
|---|---|---|
| Claim-paying capacity | $18+ billion | Varies by carrier; check AM Best ratings |
| Deductible options | 5%–25% (with restrictions) | May offer lower minimums (some as low as 2.5%) |
| Personal property limit | $25,000 max | May offer higher limits |
| Loss of use | Up to $100,000 | Varies; may offer more |
| Detached structures | Not covered | Some policies cover them |
| Masonry/chimney | Generally excluded | Some policies offer coverage |
| Rate basis | Science-based, not-for-profit | Market-based, for-profit |
| Requires companion policy | Yes (must buy through your homeowners insurer) | Some offer standalone policies |
When to Consider a Private Insurer
Private earthquake insurance might be worth exploring if:
- You want a lower deductible than the CEA offers for your property.
- You need higher personal property coverage than $25,000.
- You have a high-value home (over $1 million) and want a deductible below 15%.
- You want coverage for detached structures or other items the CEA excludes.
- You're unable to get CEA coverage through your homeowners insurer.
Always compare quotes from multiple sources. The California Department of Insurance maintains resources for comparing rates at insurance.ca.gov.
How to Buy Earthquake Insurance in California
Through the CEA
- Confirm your homeowners insurer participates in the CEA. Over 20 insurance companies are CEA members. If your current insurer doesn't participate, you may need to switch companies or buy from a private earthquake insurer.
- Contact your homeowners insurance agent. Your agent can provide a CEA quote based on your home's address and characteristics.
- Use the CEA premium calculator. Get an estimate at earthquakeauthority.com/premium-calculator before talking to your agent.
- Choose your coverage options. Select between Standard Homeowners and Homeowners Choice, pick your deductible, and decide on personal property and loss of use coverage.
- Maintain your companion policy. Your CEA earthquake policy requires an active homeowners policy with the same company for the full term.
Through a Private Insurer
- Request quotes directly from companies like GeoVera, Palomar, or Arrowhead, or work with an independent insurance broker who specializes in earthquake coverage.
- Compare deductibles and coverage terms carefully — private policies may have different exclusions and conditions than CEA policies.
- Check the insurer's AM Best rating to ensure financial stability.
California's Offer Requirement
California law requires all homeowners insurance companies to offer earthquake coverage to their policyholders every two years. The offer must be in writing and include the coverage limits, deductible, and premium. You have 30 days from the date the offer is mailed to accept it. If you don't respond, you are considered to have declined coverage.
Retrofit Discounts and Grants
One of the most cost-effective ways to reduce both your earthquake risk and your insurance premiums is seismic retrofitting.
CEA Retrofit Premium Discount
The CEA offers premium discounts of up to 25% for qualifying older homes that have been properly retrofitted. To qualify:
- The home must have been built before 1980.
- It must be wood-framed and sit on a raised foundation.
- The retrofit must include sill plate bolting and cripple wall bracing per the California Existing Building Code (CEBC, Appendix Chapter A3).
- A licensed contractor or structural engineer must sign the CEA's Dwelling Retrofit Verification Form confirming the work meets required standards.
Earthquake Brace + Bolt (EBB) Program
The California Residential Mitigation Program (CRMP) administers the Earthquake Brace + Bolt program, which provides grants of up to $3,000 to help homeowners in qualifying ZIP codes retrofit their homes. Eligible homes are typically wood-framed houses built before 1980 on raised foundations.
For more information on retrofitting: Earthquake Retrofitting: Protect Your Home
Sources
- California Earthquake Authority (CEA). "Homeowners Coverage Options." earthquakeauthority.com
- California Earthquake Authority (CEA). "2025 Rate and Policy Changes." portal.earthquakeauthority.com
- California Earthquake Authority (CEA). "Earthquake Insurance Premium Calculator." earthquakeauthority.com
- California Department of Insurance. "Earthquake Insurance." insurance.ca.gov
- Federal Emergency Management Agency (FEMA). "Earthquake Insurance." fema.gov
- Insurance Information Institute (III). "Background on: Earthquake Insurance and Risk." iii.org
- U.S. Geological Survey (USGS). "Earthquake Hazards Program." usgs.gov
- California Governor's Office (CA.gov). "California Earthquake Authority." ca.gov