SAN DIEGO — California’s largest earthquake insurance carrier, California Earthquake Authority, will be raising its rates at the beginning of next year by 6.8% on average.
“Some people are going to get a decrease, and some people are going to get potentially 12 percent, who knows? It just depends. That's what the overall state average is,” said insurance broker and independent agency owner, Karl Susman.
Given the damage from the 1994 Northridge earthquake, it's surprising that only about 13% of California homeowners have earthquake insurance.
Susman said the reason for the rate increase is higher construction costs.
“Cost of reconstruction for homes has been going up every year, not just with inflation, but they've been going up pretty dramatically since 2020,” said Susman.
The good news is that homeowners still can get earthquake insurance in California from a number of different carriers, unlike wildfire insurance, which is hard to find right now.
“If your rate (increase) comes in from the California Earthquake Authority and you think that it's too high, you can definitely shop around. You can also look to change the deductible that you have on the policy to save some money,” said Susman.
California Earthquake Authority offers rate discounts for retrofitting your home if your house was built before 1980, is wood framed, and sits on a raised foundation. Discounts also are available for retrofitted mobile homes if it has an earthquake-resistant bracing system and an approved foundation.
Homeowners also have the option of dropping earthquake insurance altogether.
“It's always surprised me because we do have earthquakes here, for sure. At this point, they are not mandating earthquake insurance for most loans that I'm aware of,” Susman said.
Before you drop your earthquake insurance, Susman said, shop around. You will be surprised at the options that are available.