Living in Los Angeles means accepting a certain level of earthquake risk. The San Andreas Fault sits just 35 miles northeast of the city, and seismologists estimate a 60% chance of a magnitude 6.7 or greater earthquake hitting the LA area within the next 30 years. Here's what most people don't realize until it's too late: your standard homeowners insurance won't cover a penny of earthquake damage. Not the cracked foundation, not the collapsed garage, not even the shattered windows. For that, you need earthquake insurance.
If you're weighing whether earthquake insurance is worth it in Los Angeles, you're asking the right question. The coverage isn't cheap, and the deductibles are high. But when the Big One hits—and scientists say it's a matter of when, not if—the difference between having coverage and going without could be hundreds of thousands of dollars. Let's break down what you need to know.
Understanding the California Earthquake Authority (CEA)
The California Earthquake Authority provides most earthquake insurance in the state. Created after the 1994 Northridge earthquake, when private insurers started pulling out of California, the CEA is a publicly managed, privately funded organization that offers earthquake policies through participating insurance companies.
Here's how it works: you can't buy directly from CEA. Instead, you purchase your policy through your existing homeowners insurance company, assuming they're a CEA member. You must already have a residential property insurance policy in place before you can add earthquake coverage. The CEA offers policies for homeowners, condo owners, mobile home owners, and renters.
A typical CEA policy covers your dwelling, personal property (with limits ranging from $5,000 to $25,000), and loss of use (temporary living expenses, ranging from $1,500 to $100,000). Building code upgrade coverage starts at $10,000, with options to increase to $20,000 or $30,000. Effective January 2025, CEA implemented a 6.8% rate increase, which translates to an average of about $70 more per year for homeowners—though your individual increase may vary based on your property's characteristics and location.
Why Los Angeles Needs Earthquake Insurance
The numbers tell a sobering story. Los Angeles sits in one of the most seismically active regions in the world. The southern segment of the San Andreas Fault—the one closest to LA—hasn't experienced a major rupture in over 300 years. Meanwhile, the central section ruptured in 1857 and the northern section in 1906. Seismologists call this pattern a "seismic gap," and it means the southern section is overdue.
Current estimates give Los Angeles a 46% probability of experiencing a magnitude 7.0 earthquake within the next 30 years, and a 31% chance of a magnitude 7.5 or greater. The southern segment of the San Andreas is capable of producing an 8.1-magnitude earthquake. Such an event would be catastrophic, potentially killing thousands and causing hundreds of billions of dollars in damage across Los Angeles, San Bernardino, Riverside, and surrounding communities.
And it's not just the San Andreas you need to worry about. Los Angeles sits atop a network of smaller faults, including the Newport-Inglewood, Raymond, and Puente Hills faults. After decades of below-average seismic activity in Southern California, 2024 saw a dramatic uptick, with 13 earthquakes measuring magnitude 4.0 or greater—a reminder that the ground beneath Los Angeles is anything but stable.
Retrofit Discounts: Making Your Home Safer and Your Insurance Cheaper
Here's some good news: you can significantly reduce both your earthquake risk and your insurance premium by retrofitting your home. CEA offers discounts of up to 25% for older homes that have been properly retrofitted. Most earthquake insurance providers offer similar discounts in the 5-20% range. When you're paying several hundred or even a thousand dollars a year for earthquake coverage, that discount adds up fast.
The most common retrofit for homes built before 1980 is called "brace and bolt." This involves bolting your house to its foundation and bracing the cripple walls (the short wood-framed walls between the foundation and first floor). The average cost ranges from $3,000 to $7,500, though it can go as high as $10,000 depending on your home's construction and accessibility.
If you own a soft-story building—typically a multi-family building with parking or large openings on the ground floor—retrofitting isn't just smart, it's legally required in Los Angeles. The city enacted a mandatory soft-story retrofit ordinance in 2015, affecting approximately 13,500 buildings. Soft-story buildings are particularly vulnerable during earthquakes because the open ground floor lacks the structural support of upper floors. The good news? Retrofitting qualifies you for substantially lower insurance premiums, since insurers view retrofitted soft-story buildings as much lower risk.
Even better, you don't have to shoulder the full cost of retrofitting alone. The California Earthquake Brace + Bolt Program offers rebates up to $3,000 for qualifying homeowners with single-family homes built before 1980. Additionally, the Earthquake Soft-Story program provides grants of up to $13,000 for eligible homeowners in Los Angeles and other California cities. To receive the CEA premium discount, you'll need to submit a Dwelling Retrofit Verification form documenting your completed and verified retrofit.
What CEA Policies Actually Cover (and What They Don't)
Let's talk about the fine print, because earthquake insurance works differently than your standard homeowners policy. First, the deductibles are high—typically between 10% and 25% of your dwelling coverage amount. If your home is insured for $500,000 and you have a 15% deductible, you're paying the first $75,000 of earthquake damage out of pocket. This is why earthquake insurance is really catastrophic coverage, not first-dollar protection.
Personal property coverage is also limited. Starting in 2025, CEA policies include a $500 sublimit for certain breakable items like glassware, pottery, crystal, china, ceramics, porcelain, and marble. Your grandmother's antique china collection? You'll get up to $500 for all of it combined, even if your personal property limit is $25,000.
The policy does cover your dwelling structure, attached structures like a garage, and loss of use if your home becomes uninhabitable. Building code upgrade coverage helps pay for the additional costs of bringing your home up to current building codes during repairs. This matters because codes have gotten stricter since your home was built, and you might be required to make expensive upgrades as part of the repair process.
Getting Started with Earthquake Insurance in Los Angeles
The first step is talking to your current homeowners insurance agent. Ask if your insurer participates in the CEA program and request a quote. Compare the coverage options, deductibles, and premiums. Some private insurers also offer earthquake coverage outside of CEA, sometimes with lower deductibles but higher premiums. It's worth getting quotes from both to see which makes more sense for your situation and budget.
Next, assess your home's earthquake vulnerability. Was it built before 1980? Does it have a raised foundation or soft story? These factors affect both your premium and your actual risk. Consider having a seismic evaluation done—many retrofit contractors offer free or low-cost assessments that can tell you exactly what work your home needs.
If retrofitting makes sense for your home, investigate available grants and rebates before you start the work. The Brace + Bolt program opens registration periodically, and the Earthquake Soft-Story grants are available for qualified properties in Los Angeles. Factor in the insurance discount when calculating your return on investment—between the premium savings and the grant money, a $5,000 retrofit might only cost you $2,000 out of pocket, and it could pay for itself in insurance savings over time.
Living in Los Angeles means living with earthquake risk. The question isn't whether to prepare, but how. Earthquake insurance won't prevent damage to your home, but it can prevent financial catastrophe. Combined with retrofitting, it's your best strategy for protecting both your home and your financial future. Start the conversation with your insurance agent today—because the best time to buy earthquake insurance is before you need it.
