California’s Earthquake Reality and Why Preparedness Matters More Than Ever
Podcast: Up to Speed
“We recently had the privilege of hearing from two of the most respected minds in the earthquake insurance space: Glenn Pomeroy, former CEO of the California Earthquake Authority (CEA), and Jerry Garcia, a seasoned expert now working with GeoVera, one of the leading private market providers of earthquake coverage. Their message was clear: California is overdue, and homeowners need to be financially ready when, not if, the next major earthquake hits.” ~ Samantha
Earthquakes don’t announce themselves, and that unpredictability makes them unique. Fires and hurricanes offer a warning. Tornadoes make noise. But earthquakes? They arrive without mercy or notice. There’s no countdown, siren, or visible path of destruction on the horizon. They just happen. Quietly. Violently. In an instant. For Californians, that reality isn’t a distant possibility; it’s a statistical likelihood. So why do 90% of homes remain uninsured for earthquakes?
Most homeowners are underprepared for seismic risk. Despite living atop some of the world’s most active fault lines, only about 10% of Californians carry earthquake insurance. That number is dangerously low. It’s time for that to change.
The Silent Risk Beneath Our Feet
California sits on a complex, restless web of fault lines. Most residents live within 30 miles of one. From the San Andreas to Hayward to the lesser-known faults, seismic energy is always building, and one day, it will release.
“It could happen today. Right now. Just… you know… buckle up.”
The 1989 Loma Prieta earthquake struck just before Game 3 of the World Series, right as players were warming up on the field.
In 2019, Ridgecrest saw back-to-back earthquakes on July 4th and 5th, the second one reaching a magnitude of 7.1, three times stronger than the Northridge earthquake.
“You’ve seen one earthquake, you’ve seen one earthquake. The next one strikes somewhere new, somewhere closer, and possibly much worse.”
Understanding the Risk: California and the Ring of Fire
The Earth’s crust is divided into massive plates that shift constantly. Where they meet, pressure builds until it’s released in the form of an earthquake. California is uniquely vulnerable, sitting directly on the boundary between the Pacific and North American plates, home to the infamous San Andreas Fault, and squarely within the Ring of Fire, a global hotbed of seismic activity.
The numbers are sobering. Last year alone, Southern California recorded 18 earthquakes above magnitude-4.0 levels not seen since the 1980s. The scientific consensus is daunting: there’s a 99.7% chance of a magnitude 6.7 or greater earthquake striking California within the next 30 years. That’s the size of the 1994 Northridge quake, which killed 57 people, injured thousands, and caused $44 billion in damage, most of it uninsured.
Are We Ready?
According to leading experts and insurance executives, the answer is a resounding no. While building codes have improved and disaster kits are more accessible than ever, most Californians still aren’t financially prepared.
“Earthquake insurance isn’t sexy. But your house? Your equity? That’s your legacy.”
Insurance agents and state officials stress that earthquake coverage is often misunderstood. Many falsely believe their homeowner’s insurance covers earthquake damage. It doesn’t. Even if FEMA steps in, the support is likely minimal.
“FEMA is not a safety net. It’s a temporary band-aid. There’s a $35,000 cap—it won’t rebuild your home in California."
Why Do People Hesitate? Why Aren’t More People Covered?
The hesitation stems from common misconceptions:
- “If I survived Northridge, I’ll be fine again.”
- “The deductible is too high.”
- “FEMA will help.”
- “Earthquakes are rare.”
These beliefs lull people into inaction.
“You can’t scare people into taking action. These statistics aren’t to frighten, they’re to inform.”
The reasons are clear and solvable:
- Lack of education: Many homeowners don’t understand that earthquake insurance is separate.
- Sticker shock: People see the deductible percentage and assume they can’t afford it.
- Agent hesitancy: Not every agent effectively explains how deductibles or claims work.
The solution? Better outreach, clearer education, and accountability. That’s why companies like GeoVera are building platforms that include declination acknowledgment forms, which not only protect agents but also trigger a second conversation with homeowners who might not fully grasp what they’re opting out of.
The California Earthquake Authority reports that “every day is earthquake season in California; earthquakes can happen at any time.”
The Case for Private Earthquake Insurance
For a long time, Californians have viewed the California Earthquake Authority (CEA) as the only option. But private carriers like GeoVera are changing the game, offering:
- Flexible deductibles
- Customizable coverage (add-ons for other structures, increased limits for demand surge)
- Lightning-fast quotes (8–10 seconds)
- Modern tools to help agents tailor protection for every homeowner
“Smart clients want smart agents. If you’re not talking about earthquakes, you’re not protecting their legacy.”
This shift also comes with a renewed focus on education. From understanding deductibles to learning how to retrofit older homes.
Earthquake Insurance: What It Covers, Why It Matters
One of the biggest myths is that homeowners’ insurance covers earthquake damage. It does not, unless explicitly added or purchased as a separate policy.
Glenn and Jerry helped break down what modern earthquake insurance looks like. There are two main policy types:
- Combined Single Limit: Covers all property lines, dwelling, personal property, and loss of use, with a single deductible. It offers flexibility in how claims are paid and is ideal for those who may not wish to rebuild in place.
- Flexible Limits: Breaks down coverage into separate lines, so you can adjust your protection based on what matters most. Whether it’s your home, retaining walls, detached garage, pool, or personal property.
Crucially, deductibles are percentage-based, not fixed amounts. That may sound scary at first, but here’s the key: the deductible is subtracted from your claim payout, not a check you pay out of pocket.
For example, if your policy has a $500,000 limit and a 10% deductible, and you suffer $300,000 in damage, your payout would be $250,000, not a dollar less, unless the loss is under the deductible threshold.
A Message for Leaders and Agents
If you’re a CEO, a broker, or a principal at an agency, this is a leadership moment.
- Ensure your teams are educated and ready to confidently offer and explain earthquake insurance.
- Treat it as a value-added service, not a checkbox.
- Protect your clients, your brand, and your business by making earthquake coverage a visible part of your risk conversation.
Every agent should be using the declination form. Every client should be given the opportunity and the understanding to make an informed choice.
Agents: The Front Line of Earthquake Protection
The responsibility isn’t just on consumers. Insurance agents play a pivotal role in educating, advising, and initiating conversations about risks that clients don’t fully grasp.
“We’re not asking you to become a seismologist. Just understand this is earthquake country, and that makes earthquake coverage a no-brainer.”
From fire to flood to earthquake to umbrella policies, it’s time for agents to ask, “Are you prepared?” Californians live in earthquake country. With a greater than 50% chance of a magnitude 6.7 or greater earthquake hitting in the next few decades, the question isn’t if. It’s when.
“The moment after a big earthquake isn’t the time to shop for coverage—it’s the time to use it.”
Get covered, get informed, and be ready.
The Role of Public and Private Markets
California created the CEA in the aftermath of the Northridge disaster when private insurers exited the market en masse. The CEA has played a critical role, but its structure is limited by state legislation. The private market is now stepping up to fill the gaps with broader options, customizable policies, and competitive premiums.
In many parts of California today, earthquake premiums are lower than homeowners’ insurance premiums, especially as wildfire risk drives up rates elsewhere. If there was ever a time for agents and consumers to take earthquakes seriously, it’s now.
The Big One: Are We Ready?
Glenn put it plainly: the CEA is financially solid, but in the event of a catastrophic quake (even less than a 9.0), massive assessments would be triggered:
- $1.7 billion from insurance companies
- $1 billion from policyholders
That’s not fear-mongering, it’s fiscal planning. These are known, codified steps. But wouldn’t it be better if homeowners were simply covered in the first place?
Closing thoughts
We can’t stop earthquakes. But we can change how prepared we are when they hit.
In Glenn’s words:
“It’s geologic time, man. It’s happened forever, and it’ll keep happening forever.”
California is built on movement. Let’s make sure we’re building insurance practices that move with it. Protect your home. Protect your future. Start the conversation about earthquake insurance before the ground starts shaking.
