Living in San Jose Means Living With Earthquake Risk

San Jose is no stranger to earthquakes. Sitting near the infamous San Andreas Fault and the Calaveras Fault, the city—and much of the Bay Area—faces a constant but often ignored seismic risk. Homeowners know to budget for rising property taxes and insurance premiums, but many skip over a crucial layer of protection: earthquake insurance.

So, is earthquake insurance worth it in San Jose? Should you add it to your current coverage? And what does it actually protect against? Here’s what you need to know to make an informed, risk-aware decision.

What Is Earthquake Insurance?

Standard homeowners insurance does not cover earthquake damage in California. To be protected in the event of a seismic disaster, you’ll need a separate earthquake insurance policy, often provided through the California Earthquake Authority (CEA) or private insurers.

Earthquake insurance can help cover:

• Structural damage to your home

• Detached structures (e.g., garages)

• Personal belongings damaged by the quake

• Living expenses if your home becomes uninhabitable (hotel stays, meals, etc.)

However, it does not cover:

• Damage from flooding (even if triggered by an earthquake)

• Landscaping or vehicles

• Pre-existing damage or gradual settling

Understanding the limits and exclusions is key to setting the right expectations.

Why San Jose Homeowners Should Take Earthquakes Seriously

San Jose sits on or near multiple fault lines, including the Calaveras, Hayward, and San Andreas faults. According to the USGS, there’s a 72% chance of a magnitude 6.7 or greater earthquake hitting the Bay Area within the next 30 years.

While minor tremors are common, a major quake could cause:

• Structural failure

• Cracked foundations

• Broken water/gas lines

• Roof collapses

• Fires from ruptured gas mains

And unlike wildfires or floods, earthquakes strike without warning. One moment of shaking could lead to six figures in damages—especially for older homes not built to modern seismic codes.

How Much Does Earthquake Insurance Cost in San Jose?

Premiums vary based on a number of factors, including:

• Year your home was built

• Foundation type (slab vs. raised)

• Construction materials (wood-frame homes perform better)

• Soil type and proximity to fault lines

• Home replacement cost

Estimated Costs:

• Typical premium: $800–$2,500/year for average single-family homes

• Higher premiums for older or unreinforced homes

• Lower premiums with higher deductibles or retrofitting

You can get coverage through:

• The California Earthquake Authority (CEA) – the largest provider, partnered with most major insurance carriers

• Private insurers – may offer alternative rates or broader coverage options

What Are Earthquake Insurance Deductibles Like?

Earthquake insurance is unique in that it uses percentage-based deductibles—not fixed dollar amounts.

• CEA policies offer deductibles of 5%, 10%, 15%, or 25% of the home’s insured value.

• For a home insured at $1 million with a 15% deductible, you’d need to cover $150,000 out of pocket before insurance kicks in.

That high deductible can be shocking—but it’s important to remember that major quakes cause major damage, and this coverage is designed for catastrophic loss.

Lowering your deductible increases your premium, but it may make the policy more usable for moderate damage.

Pros and Cons of Earthquake Insurance in California

✅ Pros:

• Protection from catastrophic loss

• Covers temporary living expenses during repairs

• Gives peace of mind in a high-risk area

• Some mortgage lenders may require it (especially for FHA loans)

⚠️ Cons:

• High deductibles make it less useful for minor damage

• Premiums can be costly, especially for older homes

• Not every loss is covered—landscaping, pools, and fences often excluded

Should You Get Earthquake Insurance in San Jose?

The answer depends on a mix of risk tolerance, financial resilience, and property type.

Ask yourself:

• Could I afford to rebuild or repair my home out of pocket?

• Do I have enough savings to cover temporary housing if my home becomes unlivable?

• Is my home older or unreinforced against earthquakes?

• Would a major loss impact my retirement, lifestyle, or legacy?

If the answer is “no” to any of these questions, earthquake insurance deserves serious consideration.

Ways to Lower Your Earthquake Risk (and Insurance Premiums)

Whether or not you purchase coverage, you can still take proactive steps to protect your home.

1. Seismic Retrofitting

Strengthening your home’s foundation can:

• Reduce damage risk

• Lower insurance premiums

• Qualify you for state/local retrofit grant programs

2. Secure Heavy Furniture

Use wall anchors for:

• Bookcases

• TVs

• Water heaters

3. Install Automatic Gas Shut-Off Valves

These devices prevent fires by shutting off gas lines after shaking is detected.

4. Create a Family Earthquake Plan

Ensure everyone in your household knows what to do and where to go if a quake hits.

What If You’re Buying or Selling a Home in San Jose?

If you’re buying:

• Ask about earthquake retrofitting.

• Check if the property is in a liquefaction or landslide zone.

• Get an insurance quote before closing to budget accordingly.

If you’re selling:

• Highlight any seismic upgrades in your listing.

• Be prepared to provide buyers with information about insurability and risk zones.

• Consider offering a home retrofit report to boost buyer confidence.

Is Earthquake Insurance Worth It in San Jose?

Living in San Jose means accepting earthquake risk as part of daily life—but that doesn’t mean you have to face it unprepared.

Earthquake insurance offers financial protection for the “what ifs” that can change everything overnight. While premiums and deductibles may feel high, the cost of not having coverage could be far greater—especially in a major seismic event.

If peace of mind, property protection, and financial resilience matter to you, earthquake insurance is well worth a look.