Here's a fact that surprises almost every buyer I work with: the homeowners insurance your lender requires almost certainly won't pay to fix your house after an earthquake.

Not the cracked foundation. Not the chimney. Not the walls.

That's not a scare tactic. It's right there in the California Department of Insurance's consumer guide: "Your homeowners insurance does not cover earthquake damage (except fire)."

So the real question isn't whether you're covered. It's whether you want to be.

A standard homeowners policy in California excludes damage caused by the shaking itself. There's one important exception: California law says homeowners and renters policies must cover fire damage that is caused by or follows an earthquake.

Everything else, from the structure to your belongings to the cost of living somewhere else while repairs happen, needs a separate earthquake policy.

No. If you have a mortgage, your lender will require homeowners insurance, but the Department of Insurance is clear that you do not have to buy earthquake insurance. It's your call.

What you are guaranteed is the chance to buy it. California law requires insurance companies that sell residential property policies to offer earthquake coverage. If you decline, they must offer it again every other year (Insurance Code sections 10081 and 10083). The Department of Insurance notes that this offer comes in writing and you have 30 days to accept it.

Most earthquake insurance in California is provided through the California Earthquake Authority (CEA), a publicly managed, privately funded organization. You can't buy directly from the CEA. You buy it through your home insurance company or agent, as long as they're a CEA participating insurer. Some private insurers also sell their own earthquake policies, so it's worth asking about both.

The good news: according to the CEA, you don't have to wait for your homeowners policy to renew. You can add earthquake coverage any time.

Per the CEA, a homeowners earthquake policy can include:

• Dwelling: earthquake damage to your house and attached structures, like an attached garage.
• Personal property: furniture, appliances, clothing and other belongings.
• Loss of use: extra living costs if your home is unsafe to live in or a civil authority keeps you out. There's no deductible on this part.
• Emergency repairs: repairs needed to prevent further damage, with no deductible on the first $1,500.
• Building code upgrades: $10,000 is included in every policy, with higher limits available.

This is the part buyers most often misunderstand. Earthquake deductibles are a percentage of your dwelling coverage, not a flat dollar amount.

CEA offers dwelling deductibles of 5%, 10%, 15%, 20% or 25%. Homes with a dwelling coverage limit over $1 million, and pre-1980 homes on raised foundations that haven't been verified as retrofitted, are limited to 15%, 20% or 25%.

Here's simple math: if your dwelling coverage is $600,000 and you choose a 15% deductible, you'd cover the first $90,000 of dwelling damage yourself. A lower percentage means a higher premium, and a higher percentage means a lower premium. There's no right answer, just the trade-off that fits your budget and your savings.

If you're buying an older home, ask about seismic retrofitting. The Department of Insurance says you may get a discount if your home is retrofitted, and that insurers must tell you about these discounts in writing. For older homes, the CEA discount can be up to 25% when the home has been properly retrofitted.

1. During escrow, ask your insurance agent for two quotes: homeowners, and homeowners plus earthquake.
2. Ask what deductible options are available for your specific home and coverage amount.
3. Look at the age and foundation type of the home. Ask the seller if any seismic retrofit was done, and whether there's paperwork.
4. If it's an older home, ask your home inspector about the foundation and bolting.
5. Decide what you could realistically cover out of pocket. That's your deductible comfort zone.
6. Remember you can add coverage later, but it only helps if it's in place before the next earthquake.

Insurance is one of those details that's easy to push to the last week of escrow, and that's exactly when it gets stressful. If you're starting your home search on the Central Coast, I'm happy to help you build these questions into your plan from day one so there are no surprises at closing. Call or text me at (805) 400-5543, email CentralCoastLiz@gmail.com, or reach out through my contact page.

Liz Anderson, Broker/Owner, Central Coast Premier Realty | DRE #01462145

General information, not legal or insurance advice. Coverage, deductibles and discounts can change. Confirm details with a licensed insurance agent and the California Department of Insurance.

Equal Housing Opportunity.

• California Department of Insurance, consumer guide "Earthquake Insurance" (updated 10/29/24)
• California Earthquake Authority, "Does Homeowners Insurance Cover Earthquakes?"
• California Insurance Code section 10083