Home Insurance in California Increases by About $2,800 to Cover Earthquake Damage
By: Ajay kumar Medagani June, 17, 2019
The state of California is endowed with a variety of geographical features—mountains, fertile plains, deserts and extended coastlines. While they add to the state’s scenic beauty, they are also associated with many natural disasters such as wildfires, earthquakes, floods, and mudslides, including some of the most disastrous ones in recent years. A standard insurance policy in the state mostly provides coverage for fire-related damages, and insurance buyers have to buy additional coverage for other natural disasters such as earthquakes and floods.
California has a higher frequency of earthquakes than any other state. In fact, 8 of the 10 most expensive earthquakes in the history of the United States have occurred here. According to FEMA – the Federal Emergency Management Agency – every year, earthquakes cause about $3.72 million in damages in California.
Gavop calculated the average annual cost of coverage only for earthquake-related damages from an annual home insurance coverage of $500,000. The image shows the city-wise ranking of places with the highest expenditure for earthquake coverage.
| City | Average Annual Cost for $500,000 of Coverage for Homeowners |
|---|---|
| Alameda | $2881 |
| Baldwin Park | $2176 |
| Azusa | $2175 |
| Banning | $2081 |
| Altadena | $2078 |
| Anaheim - Brookhurst Center | $1945 |
| Alhambra | $1944 |
| Anaheim - Federal | $1903 |
| Antioch | $1880 |
| Adelanto | $1768 |
CEA or the California Earthquake Authority is one of the largest providers of residential earthquake insurance, with a strong market presence in California. Residents can purchase insurance from CEA via its member insurance companies, which include Farmers Insurance, Foremost, Allstate, Allied Insurance, and AAA among others.
CEA offers two types of policies – Homeowners Choice and Standard Homeowners. Coverages included in each type are represented in the image below.
The coverage limit for CEA earthquake insurance is the same as in your homeowner’s insurance policy. The deductible rate is usually 10-15% of your coverage. The personal property coverage limit is about $5,000, which can be increased up to $100,000 at extra cost.
ABOUT THE AUTHOR
Ajay Kumar Medagani
Ajay Kumar works as a data analyst with Gavop. A (software) engineer by profession, he utilizes his well-established programming skills in big data, to derive insights from a wide variety of data sets. A engineering graduate from JNTU his passion involves analyzing raw data, infographics and other visual aids for research.
