Last year, South Napa experienced a magnitude 6.0 earthquake that caused about a billion dollars’ worth of damage and destroyed 6 homes. Prior to that, California hadn’t experienced a major earthquake in decades; which is probably why so few homeowners have been purchasing earthquake insurance. About 20-years ago, one-third of California homeowners had earthquake insurance policies. That number has dwindled over time to about 9% today. Part of the reason for the drop is likely the fact that there were so few damaging earthquakes during the period. Another part is probably the cost: earthquake insurance can be expensive, and there’s no real guarantee it will ever come in handy.

What many folks don’t realize until it’s too late is that run-of-the-mill homeowner’s insurance doesn’t cover earthquakes. A person must purchase an additional earthquake policy or add one on to their existing homeowner’s police. Depending on the location and size of the home, the average cost of earthquake insurance in California can be anywhere from $800 per year to $5,000 per year – prompting many homeowners to wonder if it’s worth the cost.

Earthquake insurance usually has a high deductible cost associated with it, meaning that the homeowner will have to pay a pretty substantial amount out of their pocket before their insurer will pay out a claim. What many people don’t know, though, is that there are 2 kinds of earthquake insurance: structural insurance and personal property insurance. Structural insurance is the one that will pay out of the home is damaged, and usually includes a high deductible. Personal property insurance, though, often has a very reasonable deductible and is the one that will replace the things you own that were destroyed as a result of the earthquake.

Ultimately, it’s up to you whether or not you want to purchase earthquake insurance for your home. It might be wise, at the very least, to check and see what the rate would be for your home and if you can fit it into your budget. According to the experts, California is set to experience a major earthquake in the coming years. But, hey, they’ve been saying that for decades, haven’t they?