Earthquake insurance rules are slightly different in California

Life Insurance - Earthquake insurance rules are slightly different in California. There, earthquake insurance is available from private insurers and from the California Earthquake Authority, a privately funded, publicly managed organization.Only 11.9 percent of California homeowners have earthquake insurance from either a private insurance company or CEA, according to the Insurance Information Network of California.

Earthquake insurance rules are slightly different in California

Moraga says the average annual premium for a CEA earthquake policy in 2009 was $707.

In California, the CEA policy excludes damage to swimming pools, spas, driveways, outbuildings, crystal, chandeliers and numerous other contents specified in the policy, Moraga says.

"We always urge homeowners to read their policies and understand what is and what is not covered," he says.

Moraga says that CEA policies cover structural damage up to the limit of the standard home insurance policy but limit contents coverage to $5,000 to $15,000 and loss of use coverage for living expenses to between $1,500 and $2,000. Private insurers in California may offer different coverage limits.

"If your car is damaged or destroyed by an earthquake, that damage is covered by your comprehensive coverage in your auto insurance policy," says Moraga.

Earthquake insurance deductibles in California are higher than in other parts of the country because of the level of risk is higher, Moraga says.
Post-earthquake damage

Some of the worst damage from an earthquake can follow the quake when gas pipes burst or cracked water pipes cause a flood. Homeowners insurance policies often cover such damages.

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"A fire is a 'covered peril' in a standard home insurance policy and will be covered regardless of whether it is caused by an earthquake or not," says Moraga. "Homeowners who do not have earthquake insurance will still have fire damage covered."

Flood damage caused by a tsunami following an earthquake, such as occurred in Japan, would require a separate flood insurance policy, according to Moraga.

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