Do you want insurance with that shake?

Bridge damage from the Loma Prieta Earthquake. Photo credit: Joe Lewis

Bridge damage from the 1989 Loma Prieta Earthquake. Photo credit: Joe Lewis

I come from the land of tornadoes in the Upper Midwest. I’ve spent nights in the basement, watched rotating clouds for much longer than was wise and picked up softball-sized hail in the aftermath of the storm.

But now I live in California, land of earthquakes, and my husband and I are buying a home in Santa Clara County, about 50 miles from San Francisco. As we navigate buying earthquake insurance, I found the decision to be tricky, even for a trained geologist like me.

Earthquake coverage: What is it?

I started my education by visiting the California Earthquake Authority, or CEA, webpage. Earthquake insurance covers your home from all the damage that can happen as a result of a shaking event and will pay for temporary housing if your home becomes unsafe. I admit I was surprised to find out earthquake coverage is not included in your homeowner policy, but is instead a separate policy. In addition, earthquake insurance is not required—you can forgo coverage completely.

In fact, as of January 6, 2016, less than 10 percent of homes in California have earthquake insurance, said Glenn Pomeroy, the CEA’s chief executive officer.

After focusing on seismic hazards during most of my career, I wondered why people forgo coverage. I decided to ask some Californians about their insurance. Most scoffed, with one incredulously exclaiming, “No one has earthquake insurance! The rates are through the roof!”

I felt chagrined. Had the woman who watched funnel clouds touch down before sprinting to the basement become a Chicken Little about earthquakes?

Likelihood of being in an Earthquake

California is like a pane of shattered glass, with one giant crack running along the edge: the San Andreas Fault. Although the San Andreas is a big player in earthquake hazards, there are many smaller faults that cover the state, join up with the bigger fault and generally add to the complexities of predicting earthquakes.

Geologists and seismologists analyze all these faults and present maps of earthquake risks, shown in bright colors (see below).

Map showing earthquake hazard from anticipated future earthquakes. Santa Clara county is orange and red, denoting a moderate to high earthquake hazard. Map altered from Branum and others, 2008.

Map showing earthquake hazard from anticipated future earthquakes. Santa Clara county is pink (highest hazard), red and orange, denoting a high to moderate earthquake hazard. Map altered from Branum and others, 2008.

Seismologists have calculated that within the next 30 years, there’s a 99.7% chance of a magnitude 6.7 or greater earthquake hitting California, and a 76% chance of a magnitude 7.0 or greater earthquake striking Northern California.

Anyone can discover hazards in their area, even for a specific address, by using the website My Hazards. I discovered that my house is in a liquefaction zone. Liquefaction occurs when the ground temporarily acts like a liquid during shaking. It’s like placing your house on watery quicksand—never a good foundation for a home.

Map showing seismic hazards in Campbell and south San Jose. The olive green blobs show areas of liquefaction—when the ground temporarily acts like a liquid during and earthquake. Guess which area my new home will be in? Find the seismic hazard for your home here.

Map showing seismic hazards in Campbell and south San Jose. The olive green blobs show areas of liquefaction—when the ground temporarily acts like a liquid during an earthquake. Guess which area my new home will be in? Find the seismic hazard for your home here.

Despite earthquake-related risks, many Californians are a gambling population when it comes to insurance. “I think the long-term nature of the hazard reduces the sense of urgency, despite the potential total devastation of the worst-case event,” said Thorne Lay, a seismologist at UC Santa Cruz.

Knowing an earthquake may hit in the next 30 years and might cause damage makes earthquake insurance feel like a lower priority—the risk seems vague in comparison to everyday hazards like driving, especially when you consider the costs.

Cost of Insurance

Convinced by the high likelihood of an earthquake, I started shopping for a policy. Using a premium calculator offered by the CEA, I calculated earthquake insurance would cost anywhere from $1,200 to $3,600 a year. This rate was more than my regular homeowner insurance, and in some cases almost four times as much. I now understood why some people sputtered about the exorbitant rates.

To combat rates from being prohibitive, the CEA rolled out changes in 2016 that can make a big difference in cost. Homeowners can now pick their deductibles, whether they want to have coverage for their personal possessions, and other options that can change their rates. Pomeroy said, “Californians can choose a policy to meet their needs and budget – it is no longer a ‘one size fits all’ proposition.”

Final verdict?

At the end of the day, we are going to purchase earthquake insurance. If we build enough equity, our need for insurance might drop; if a new fault is discovered down the street, we may up our coverage.

I’m setting a yearly calendar reminder now: assess earthquake insurance.