The three basic parts of the earthquake coverage which is being offered by the California Earthquake Authority are:   

The Dwelling Coverage

Sometimes referred to as Coverage A, the dwelling coverage insures your home up to a certain amount, known as the limit.

• The limit on your earthquake insurance is the same as that on your homeowner’s insurance. 
• CEA offers deductibles of 5%, 10%, 15%, 20%, and 25%. You do not have to pay the CEA deductible up front in order to receive a claim check, it is merely the amount deducted from the total covered losses.
• As with most of the earthquake insurance policies, CEA does not cover landscaping, fences, separate building, masonry or pools.
• To cover exterior masonry veneer, you will have to add that coverage separately to the policy. 
• If you are renting or own a condominium, you do not require this coverage. 

Personal Property Coverage

This is sometimes referred to as Coverage C and covers all the personal belongings inside your houses such as furniture, Televisions, and computers. 

• The limit begins at $5,000 and you have the option to increase this limit to $200,000
• Commodities such as crystal and china dishes are insured when you purchase the optional breakable coverage.

Additional Living Expenses (ALE)

Referred to as Coverage D, this covers the additional expenses to live somewhere else whilst the area is being evacuated or your house is being rebuilt or repaired. 

• Covers the temporary rental of a home, hotel room, apartment, temporary telephone line, laundry, moving and storage, and furniture rental.
• It is bound to a reasonable time which is required to repair your house or for you to move to another permanent house 
• The limit range is from $1,500 to $100,000
• This coverage never has a deductible under California Earthquake Authority

All insurance policies have exclusions. Following are some of the things the earthquake insurance policy does not cover. To learn more about the exclusions, it is important that you read through the policy you have.

Some common exclusions in the earthquake policies are as follows:

Fire

Earthquake insurance in California does not usually cover anything that your homeowner’s policy is already covering. For instance, the homeowner’s policy covers fire damage, even if an earthquake causes the fire. Thus, earthquake policies do not cover the fire damage.   

Land

Mostly, earthquake insurance does not cover the damage caused to your land, for example, sinkholes due to erosion or other hidden openings under the land. You might be able to purchase limited additional coverage to restore or stabilize the land.  

Vehicles

Earthquake insurance does not cover damage to your vehicles. Check your auto insurance policy to find out if it covers that damage.

Flood

Earthquake insurance does not cover any water damage from outside your home, such as sewer or drain backup, flood, or tsunami. A flood insurance policy will cover you.

Determining if you need earthquake insurance has become more important than ever, even if you do not live near a fault line. Not only can earthquakes leave an impact far beyond the major fault lines, some areas of the country, notably, parts of California, are suffering from more seismic activity as a result of oil drilling efforts. If you are thinking about purchasing a home in an earthquake-prone location, it is advisable to look into the cost of insurance coverage to understand the home’s true cost.

Ask yourself the following questions to determine if you need earthquake insurance or not:

• Can you afford the cost of rebuilding or repairing your home if it damaged?
• Can you replace your personal belongings if they are damaged or destroyed?
• Can you afford to pay for temporary housing and other expenses if structural damage makes your home uninhabitable?