Image showing house and text saying earthquake insurance

Earthquake Insurance, Not Always the Best Option.

Seismic Retrofitting is an Option

We urge you to compare the costs of a retrofit versus insurance.  More than likely you need a no cripple wall retrofit or a cripple wall retrofit.  Both of these retrofits are extremely effective.  The cost of repairing a retrofitted houses in many cases will be less than the deductible on your expensive earthquake insurance policy. All the evidence shows that you and your retrofitted house should more or less be fine.

In July of 2018 the CEA (California Earthquake Authority) FAQ page states:

Q. Could the CEA pay all of its claims if there is an earthquake?

A. “CEA has a claim-paying capacity of more than $15 billion. CEA could cover all claims if the 1906 San Francisco, 1989 Loma Prieta, or 1994 Northridge earthquake reoccurred.”

This may be true, but the amount of damage from a large earthquake on the Hayward Fault is forecast to be $165 billion, far more than the CEA will be able to pay.  If the expected large earthquake occurs in Los Angeles, $200 billion dollars of damage to homes is expected according to this promotion article published by the CEA. $15 billion pales in comparison to the $165 billion and $2oo billion in projected damage.  If the Bay Area and Los Angeles have large earthquakes at the same time, nothing will be left.

Insurance and retrofits are not mutually exclusive and if you want to be prepared for the very worst scenario you might want to do both.  But if not, remember, you pay for a retrofit only once.  The cost of a retrofit usually has a pay back of 4-6 years and will serve to protect you far more than an insurance policy.

More importantly, a seismic retrofit can allow you to avoid the most serious consequences of the disaster altogether and rather than dealing with a catastrophe you are now dealing with an inconvenience.  In short, a seismic retrofit can protect your home, your finances, and your health.

Should I Carry Earthquake Insurance or Retrofit my House?

One must consider three factors before answering this question:


Earthquake insurance will not protect you from harm.  Earthquakes can kill or seriously injure people, especially in soft story, hillside, or other vulnerable homes.  A retrofit could save your life; earthquake insurance cannot.


Losing a home and/or bodily injury creates extreme stress.  This makes getting your house and life back to normal difficult and time consuming.  Besides Red Cross shelters, temporary housing alone will be difficult to find and cost a fortune.  You will probably need to leave the area and stay with relatives.

Financial loss

Temporary housing and loss of work can add up.  Structural earthquake damage to a home can be considerable; even devastating, and very expensive to repair.  An added concern is that due to high demand finding a contractor will be difficult to find; delaying rebuild time.

Even if you have insurance, you might not be able to collect on it.

In the event San Andreas and Hayward Fault earthquakes happen more or less at the same time, then what?

In July of 2016 the CEA website stated, “If an earthquake causes insured damage greater than the CEA’s claim-paying capacity, policyholders with earthquake damage may be paid a prorated portion of their covered losses. Or the CEA Governing Board may approve installment payments.”  

I guess they took it down because it was bad for business.