California Earthquake Insurance Inquiries Rise After Recent Tremors

California homeowners have increased calls to insurance brokers seeking earthquake coverage after a series of recent tremors, including a 4.2-magnitude quake near Frazier Park on Sunday and a 5.6-magnitude event in Northern California at the end of June. Brokers report daily inquiries rising from five to more than 40. One broker stated that calls have increased by 700 percent in recent weeks.

A typical three-bedroom ranch-style home in a valley area carries an annual premium of about $2,000. Deductibles generally range from 10 to 15 percent, meaning an owner of an $800,000 home could face up to $120,000 in out-of-pocket costs. One owner of a four-unit building in Venice pays $8,000 a year for an insurance package that includes earthquake coverage but would still owe a $100,000 deductible if damage occurs.

The 1994 Northridge earthquake, a magnitude 6.7 event, killed 57 people and caused more than $20 billion in insured losses. Before that quake, roughly 29 percent of California homeowners carried earthquake insurance; the share has since fallen below 10 percent.

State lawmakers created the California Earthquake Authority in 1996 to stabilize the market after many private insurers stopped writing new policies. Coverage must be purchased separately from standard homeowners policies, either through the authority or private carriers.