Earthquake insurance

No. Every standard homeowners policy excludes earth movement, so ground shaking that cracks your foundation or collapses your home pays nothing on the base policy. The same is true of the commercial property special form and the businessowners policy. Coverage comes back only two ways: an endorsement that buys the peril back onto your existing policy, or a separate policy written for it, a California Earthquake Authority or standalone policy for a home, a difference-in-conditions policy for a commercial building. One narrow exception is fire: if a quake ruptures a gas line and the resulting fire burns the home, that fire loss is generally covered by the base fire policy, not the earthquake exclusion. The shake damage itself still needs earthquake insurance.

Because earthquake is a catastrophe peril, insurers set the deductible as a percentage of the insured value, typically 5 to 25 percent, rather than a flat dollar figure. On a $400,000 structure, a 15 percent deductible means you absorb the first $60,000 of damage before the policy pays. You do not pay it up front; it is subtracted from your covered loss. The structure and contents can carry separate deductibles, though only one applies to a single quake. The practical effect is that a moderate earthquake can sit entirely inside your deductible and pay nothing, which is why sizing the deductible to a loss you can actually self-fund matters more here than on almost any other line. A lower deductible costs far more in premium but pays on smaller events.

California carries the highest exposure, but the risk is far broader. The Pacific Northwest sits over the Cascadia subduction zone, which threatens Washington and Oregon with a major offshore quake. Alaska is the most seismically active state in the nation. Nevada and Utah, where the Wasatch fault runs through Salt Lake City, both carry real hazard. The New Madrid Seismic Zone puts about 11.6 million people across Missouri, Tennessee, Arkansas, Illinois, Kentucky, and neighboring states at risk. Oklahoma has seen a surge in induced seismicity tied to wastewater injection wells, and Charleston, South Carolina, sits on a historically active zone. If you own a building in any of these regions, the base property exclusion leaves a real gap.

No. The CEA is the largest residential earthquake insurer in California, writing about two-thirds of the state's policies through participating home insurers, but it is not the only option. Standalone and specialty carriers write residential earthquake outside the CEA, sometimes with lower deductibles or broader terms. For commercial buildings, the standard route is a difference-in-conditions policy from an excess and surplus carrier, which adds back the earthquake and flood the base property form excludes and can be built with its own deductible, contents, and business income. Outside California, coverage in the Pacific Northwest, the New Madrid states, and other seismic regions comes from standalone endorsements and DIC markets rather than a state authority. Coverwatch places across all of these.

It depends on whose policy you mean. An HOA master policy almost always excludes earthquake, so the association's building and common areas are unprotected unless the HOA buys a separate earthquake or difference-in-conditions policy. That leaves a unit owner exposed twice: to damage inside the unit, and to a special assessment the HOA levies to repair common-area quake damage or to pay the master policy's earthquake deductible. A unit owner's own earthquake policy covers the unit interior, and loss-assessment coverage pays the assessed share of the common-area loss, including the deductible, even when the unit itself is undamaged. Because master policies exclude the peril, loss-assessment coverage is often the most important piece of a condo owner's earthquake protection.