The United States Geological Survey (USGS) predicts that California has a 99.7% probability of having an earthquake magnitude of 6.7 or larger during the next 30 years, where the southern segment of San Andreas Fault and Hayward Fault are the most likely earthquake sources to strike Los Angeles and San Francisco in Southern and Northern California, respectively. If you live in California and own your home, it is probably your biggest financial asset. Your assets and investments made in personal possessions may be at risk especially if you live within 30 miles of active major fault lines. Even if your home is completely destroyed, you will still be responsible for any existing personal debt such as mortgage, auto loans, and credit card payments. On top of that, all of the property repair or rebuild due to earthquake damage will end up being paid for by you. Why?
Repairing or rebuilding your home would be your responsibility because homeowners insurance and condo insurance do not cover earthquake damage to the structure of your home or its contents, as well as your personal possessions. However, coverage for other kinds of loss or damage that may result from earthquakes, such as fire and water damage due to burst gas and water pipes, is provided by your standard homeowners insurance. Loss or damage from flooding due to tsunamis that may be generated by earthquake movement of the ocean floor (such as the mega tsunami that followed the 2011 Japan Earthquake) is only covered under a stand-alone tsunami insurance or flood insurance that specifically include losses due to tsunamis. Moreover, earthquake damage to your vehicles is only covered under the comprehensive part of an auto insurance policy.
In the meantime, you may wrongly believe that the US government will take care of all your financial needs if your home and/or home contents suffer losses from earthquake damage, which is not true (the 2005 Hurricane Katrina is a good example). In fact, the federal disaster assistance is only available after the US President signs a major disaster declaration. Once issued, FEMA activates a disaster relief program named “Assistance for Individuals and Households Program”, which is designed to help Americans get partly back on their feet but not to replace everything they lose. The federal disaster relief is in the form of low-interest loans to eligible individuals to cover losses in personal possessions and homeowners to repair or rebuild a damaged primary home, or FEMA disaster grants for those who do not qualify for the loans.
That being said, how do you plan to protect your assets and investments from the costs of future inevitable California Earthquakes? Earthquake insurance is an effective option for managing these potential costs. You can get coverage from the participating earthquake insurance companies that are members of California Earthquake Authority, CEA. The standard earthquake insurance policy from CEA is designed to provide basic coverage against earthquake damage covering the home structure, home contents, and personal possessions, which are subject to a 15% standard deductible, with some limitations and exclusions. Insurance premiums of CEA basic policy range $3.91-$5.25 per $1,000 of coverage. Optional coverage of your choice is also available for applying 10% deductible instead of 15%, for building code upgrade, or to increase the coverage value of your home contents, personal possessions, or loss of use.
The USGS earthquake map below shows the active fault lines in the Los Angeles region along with the peak ground acceleration (PGA) with 2% probability of exceedance in 50 years as a ratio of the acceleration due to gravity (g) at the elevation of the base rock, which will probably be amplified to the ground surface at your home during an earthquake. Earthquake insurance would be beneficial at seismic zones exceeding 0.47g.
Peak Ground Acceleration at Los Angeles
Other information at http://seekyt.com/california-earthquake-insurance/