Based on the history and likelihood of earthquakes in the West, insurance for California homes should be a first consideration for policy holders. Recent information from the California Department of Insurance reveals that only 12 percent of Californians buy earthquake insurance. It has to be purchased separately from a conventional home insurance policy, which typically does not cover earthquakes.
Insurance industry experts believe most people forego earthquake insurance because it has a far more expensive monthly premium than a regular home policy. In California, an earthquake policy could cost almost $700 per year. In addition to the premiums, there is also a high deductible, sometimes as much as 15 percent of the home value. If the average home cost is $400,000, the home owner will have to pay $60,000 as a deductible. Some homeowners simply cannot afford to pay an expensive out-of-pocket cost if their homes are damaged in an earthquake.
One thing that has helped some Californians find some balance in policy prices has been finding the right insurance company. Many offer one price based on the value of the home and the location. The most effective companies, however, are able to offer a range of policy prices for a proper comparison.
Securing a home with high deductible earthquake insurance is often better than having no coverage at all. Owning a home in California without coverage puts a huge asset at risk. Home owners who forego the coverage are sometimes left having to start all over when an earthquake hits.