Earthquake insurance, and the letter that starts a 30-day clock

The California Department of Insurance opens its earthquake guide by removing an assumption: homeowners, renters, and condominium insurance policies do not cover damage from natural disasters such as earthquakes, floods, and landslides. Earthquake cover is a separate purchase, and in a city whose General Plan says that proximity to the San Andreas Fault makes the city susceptible to the highest level of earthquake hazard risk related to ground shaking, the separateness is the first thing worth knowing.

The letter that arrives every other year

California does not leave the decision to memory. If you have homeowners insurance in California, your company must offer to sell you earthquake insurance, and it must offer this every other year. The offer must be in writing, and it must tell you the amounts it covers, the deductible, and the premium. Then comes the clause that catches people: you have 30 days to accept the offer, the 30-day period starts the date the company mails the offer to you, and if you do not reply, you are rejecting the offer. The clock is triggered by the mailing, not by the day the envelope reaches a kitchen table, and silence is a decision rather than a delay.

How a California Earthquake Authority policy is built

The California Earthquake Authority provides most earthquake insurance in the state. You cannot buy from it directly; you buy from member insurance companies, and you must already hold a residential property policy with the same company. The basic cover has three parts.

Part 1 — dwelling

The limit on your earthquake insurance is the same as the limit on your homeowners insurance dwelling coverage. Deductibles offered are 5%, 10%, 15%, 20% and 25%, with a 15% floor in two stated cases: a home valued over $1 million dollars, and a home built before 1980 on a raised or other non-slab foundation that is not verified as seismically retrofitted.

Part 2 — personal property

Cover for things in the home. The limit starts at $5,000 and can be increased to $25,000.

Part 3 — additional living expenses

Temporary and extra costs of living elsewhere while the area is evacuated or the home is repaired, with limits ranging from $1,500 to $100,000. This part never carries a deductible under the Authority’s policy.

Condominium unit owners get a further piece: an association may impose an assessment for covered earthquake damage, and Authority condo policies provide up to $100,000 toward a unit owner’s share of certain assessments. Building code upgrade coverage may be available to buy, now up to $30,000, and homeowners policies from the Authority include the first $1,500 for emergency repairs with no deductible.

Where earthquake cover stops

As with most earthquake policies, the Authority’s insurance does not cover landscaping, pools, fences, masonry, or separate buildings. It usually does not cover anything the homeowners policy already covers, usually does not cover damage to your land, such as sinkholes from erosion or other hidden openings under it, and does not cover damage to your vehicles — for those, the guide says to check your auto insurance policy to find out if it covers that damage. It also does not cover water damage from outside the home, including flood and tsunami, even where an earthquake caused the water to arrive.

The fire exception, which runs the other way

One rule points in the opposite direction and is worth carrying: California law says that both homeowners and renters insurance must cover fire damage that is caused by or follows an earthquake. That cover applies whether or not you hold earthquake insurance, and because the homeowners policy already answers for it, the earthquake policy does not.

Retrofitting, and what it changes

Cost depends on how the home is made and what sits under it; the Department says it is usually higher for older homes, homes built of brick or masonry, homes with more than one story, homes on sandy soil rather than clay or rock, and homes that are not up to code. An insurer must still offer cover to a home that does not meet current bolting and water-heater rules, though the premium or deductible may be higher. Retrofitting can reduce damage, reduce insurance costs, and bring a home up to code, and with Authority insurance older homes may qualify for a discount of up to 25 percent if they have been properly retrofitted. Bolting a house to its foundation, bracing the chimney and the water heater, fitting automatic gas shut-off valves and strengthening cripple walls with plywood are the measures the Department lists.

What the city’s own hazard mapping says

Palmdale’s Safety Element names the faults in the city: the San Andreas, Nadeau, Cemetery, Little Rock, and Leona Avenue, all of them considered active or potentially active. It is estimated that large and potentially destructive earthquakes occur on the San Andreas Fault about every 130 years. The Alquist-Priolo Earthquake Fault Zoning Act requires State Geologists to delineate special study zones along known active faults; the San Andreas Fault zone is among those identified, so the City regulates development within those seismic hazard zones and requires a detailed geotechnical report and fault rupture survey for proposed development inside one. The chapter also maps liquefaction, noting that the majority of Palmdale consists of low relative liquefaction susceptibility zones while risk zones are present, including Little Rock Wash in the eastern portion of the city, Anaverde Creek, and areas along the San Andreas Fault. All of this is hazard mapping done for development review. It is not a statement about any particular household, and nothing on this page treats it as one.