How Does an Earthquake Insurance Deductible Work? Everything You Need to Know

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February 28, 2025

When purchasing earthquake insurance, one of the most important factors to understand is the deductible. Unlike standard homeowners insurance, which typically has a fixed dollar amount deductible, earthquake insurance uses a percentage-based deductible. This distinction can significantly impact how much you pay out of pocket after an earthquake.

Unfortunately, many homeowners assume they have no choice but to use California Earthquake Authority (CEA) coverage, which often comes with high deductibles and limited flexibility. However, private earthquake insurance providers offer lower deductibles, more customizable coverage, and better overall financial protection.

In this guide, we’ll break down how earthquake insurance deductibles work, why private earthquake insurance is the better choice over CEA, and how to select the right deductible for your needs.

What Is an Earthquake Insurance Deductible?

An earthquake insurance deductible is the amount you must pay out of pocket before your insurance policy starts covering the remaining costs. Unlike traditional homeowners insurance, where deductibles are fixed amounts (e.g., $1,000 or $2,500), earthquake insurance deductibles are based on a percentage of your home’s insured value.

For example, if your dwelling coverage is $500,000 and you have a 10% deductible, your out-of-pocket responsibility would be $50,000 before insurance covers the rest.

Why Private Earthquake Insurance Is Better Than CEA

The California Earthquake Authority (CEA) is often the default option when homeowners purchase earthquake insurance, but that doesn’t mean it’s the best. Here’s why private earthquake insurance is a superior choice:

✅ Lower Deductibles – While CEA deductibles start at 5% and go up to 25%, private insurers offer more flexibility, with options as low as 2.5%.
✅ Customizable Coverage – CEA coverage is rigid, while private earthquake insurance allows for tailored protection, including personal property, loss of use, and other structures.
✅ Better Financial Strength & Faster Claims Processing – Private insurers often have stronger financial backing and process claims more efficiently.
✅ No Forced Restrictions – CEA enforces higher deductibles for homes valued at $1 million+ and for older homes that haven’t been retrofitted. Private insurers, such as GeoVera and Palomar, provide better flexibility.

Earthquake Insurance Deductible Ranges

Deductibles typically range between 2.5% and 25%, depending on your insurance provider, location, and home type.

Private Earthquake Insurance Deductible Options

✔ GeoVera (Available in CA, WA, and OR)

• Single Limit Program: 10%, 15%, 20%, and 25% deductible options.
• Coastal Select Flex Limit Program: 2.5% to 25% deductible options.
• No slope restrictions, and more flexible underwriting than CEA.

✔ Palomar (Available in CA, WA, and OR)

• Deductibles from 2.5% to 25%.
• No geographic restrictions, making it an excellent option.

✔ Zurich (Available in CA)

• Deductibles of 5%, 10%, and 15%.
• More flexibility in coverage than CEA policies.

CEA Deductibles (Higher & More Restrictive)

• 5%, 10%, 15%, 20%, and 25% deductible options.
• Homes valued at $1 million or more and those built before 1980 without retrofitting must have a minimum deductible of 15%.
• Limited options for customizing personal property and loss-of-use coverage.

How to Choose the Best Deductible for Your Home

Choosing the right deductible depends on your financial situation, risk tolerance, and premium costs.

1. Do You Want Lower Monthly Premiums?

✅ A higher deductible (15% or more) lowers your premium but requires you to pay more out of pocket after an earthquake.

2. Do You Want the Lowest Out-of-Pocket Costs?

✅ A lower deductible (2.5% to 10%) means you’ll pay less after an earthquake but have slightly higher monthly premiums.

3. Does Your Home Qualify for Better Coverage?

• If your home is worth $1 million+ or built before 1980, CEA forces a higher deductible.
• Private carriers offer more flexibility, making them a better choice for many homeowners.

Get a Free Quote & Find the Best Earthquake Insurance Policy for You!

Now that you understand how earthquake insurance deductibles work and why private earthquake insurance is the smarter choice, you can make a more informed decision about your coverage.

Final Thoughts

Many homeowners automatically default to the California Earthquake Authority (CEA) without realizing that better, more affordable private earthquake insurance options exist. By choosing GeoVera, Palomar, or Zurich, homeowners gain lower deductibles, better flexibility, and superior financial protection.

Get covered today and ensure your home is protected the right way.