Earthquake Insurance

Many people think that their homeowner’s policy protects them against earthquake damage, but most standard homeowners, mobile home owners, condominium, and renters insurance policies do not; instead, it must be purchased separately. By law, insurers must offer earthquake coverage to their policyholders, through the California Earthquake Authority (CEA). The cost runs approximately $4 per thousand of coverage, and typically has a 15% deductible.
There are government disaster-relief programs available, but they are intended more so to help you start getting back on your feet, not necessarily to rebuild your home and replace personal items lost in an earthquake. It is important to protect your home from earthquake damage because for most of us, it is our biggest financial asset.

Personal Property Coverage (Coverage C)

Personal Property coverage protects many items in the typical home, including furniture, TVs, audio and video equipment, household appliances, bedding, and clothing.

A base policy provides up to $5,000 to replace personal property, but you can increase your Personal Property coverage to as much as $100,000.

Dwelling Coverage (Coverage A)

Dwelling coverage helps protect the investment you have made in your home. It will help pay to repair or, (up to the policy limit) replace, an insured home when structural damage exceeds the policy deductible. You may select a 10% or 15% deductible for your Dwelling coverage.

The insured value of your home, as stated on the declarations page of your companion homeowners insurance policy, determines the Dwelling-coverage limit of your CEA earthquake policy. If your home’s insured value changes in your homeowners policy, the insured value for your earthquake coverage will change, too, and that will affect your earthquake-policy premium.

Personal Property Coverage: Increased-Limit Options
Base
Coverage
Option
1
Option
2
Option
3
Option
4
$5,000 $25,000 $50,000 $75,000 $100,000

Additional Living Expense/Loss of Use Coverage (Coverage D)

If damage from an earthquake prevents you from living in your home, your CEA policy may pay for necessary increases in living expenses you incur to maintain your normal standard of living.CEA Additional Living Expense/Loss of Use coverage on a property you own and rent to tenants can help protect your rental income, to the limit of that coverage.A base policy provides $1,500 of Additional Living Expense coverage or you can increase that coverage to as much as $15,000.

Additional Living Expense Coverage: Increased-Limit Options
Base
Coverage
Option
1
Option
2
$5,000 $10,000 $15,000

Additional Coverages

Limited Building Code Upgrade

In most California communities, repairing or rebuilding a home after an earthquake must be done according to current building codes. In addition to providing funds for repairing or replacing your home, the CEA base policy includes an additional $10,000 in Building Code Upgrade coverage.

Option to Increase Building Code Upgrade Coverage

For policies that renew or become effective on or after July 1, 2006, homeowners can choose to increase Building Code Upgrade coverage by an additional $10,000, for a total Building Code Upgrade coverage limit of $20,000.

Items Not Covered

Dwelling-Related Items

Your CEA policy excludes some items from dwelling coverage. A partial list of items that are not covered includes:

  • Detached garages and most other structures that are not part of the dwelling
  • Land damage (other than $10,000 in coverage for land stabilization)
  • Swimming pools and spas
  • Awnings and patio coverings
  • Fences, landscaping, and irrigation systems
  • Antennas and satellite dishes
  • Patios and decks
  • Walkways and driveways not needed for pedestrian or disabled access to your home
  • Certain decorative or artistic items such as mirrors, chandeliers, stained glass, or mosaics

Personal Property

A partial list of personal property items not covered by your CEA policy includes:

  • Animals, birds, or fish
  • Artwork, photographs, and ceramics
  • Motor vehicles (such as cars, trucks, and motorcycles), riding lawn mowers, trailers, golf carts, and watercraft
  • Glassware, crystal, porcelain, and china
  • Spas and hot tubs

Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.

Coverage Sublimits

Sublimits – Dwelling Coverage

Once damage to your dwelling has exceeded your CEA policy’s deductible, the policy covers reasonable emergency repairs in an amount up to 5% of the insured value of the home as part of the dwelling limit of insurance.

As part of the dwelling limit of insurance, your CEA policy will pay up to $10,000, including engineering costs, to replace, rebuild, stabilize, or otherwise restore land you own that is necssary to support your home. The policy does not provide any other coverage for land.If your dwelling has one or more chimneys damaged by an earthquake, your CEA policy includes a single sublimit of $5,000 to repair or replace all dwelling chimneys.

Sublimits – Personal Property Coverage

Personal Property coverage sublimits include the following:

  • $1,000 for damage to electronic data-processing equipment such as computers and printers
  • $250 for money, bank notes, coins, and medals
  • $300 for business property

Your CEA policy contains exclusions and special limits of coverage—read the entire policy to become familiar with what is and is not covered. If you still have questions about your CEA policy after reading the information on our Web site, please contact your insurance agent or your homeowners insurance company.

My name is Dennis Dellinges, born and raised in San Francisco and have been a Farmers agent for over 30 years. If you should have any questions regarding this or any insurance matters, please feel free to contact my office, 415-585-2700.

For more information about earthquake insurance visit www.earthquakeauthority.com.

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