Home > Blog > What Does Earthquake Recovery Look Like?

What Does Earthquake Recovery Look Like?

Many Californians still believe the myth that the government will bail them out if they do not carry earthquake insurance. Below are examples of previous earthquakes that have damaged California and the recovery that was needed versus what was received.

1906 San Francisco Earthquake

Stanford University 1906 Earthquake Damage

  • Buildings destroyed: 28,000
  • Monetary Loss: More than $400 million for all damages; $80 billion from the earthquake alone (in 1906 dollars)1

In 1906, organizations such as FEMA or the California Earthquake Authority didn’t exist. The people of San Francisco and neighboring communities had to rely heavily on relief efforts and donations.


1994 Northridge Earthquake

  • Buildings destroyed: 82,000 residential and commercial, 5,400 mobile homes
  • Monetary Loss: Approximately $49 billion; $20 billion in damages2

Northridge Shakemap

After the dust settled on one of the costliest earthquakes in US history, this earthquake shook the foundation of the residential insurance industry. Insurance companies had greatly underestimated the costs associated with damage from an earthquake. Fearing another damaging earthquake, by January of 1995 companies representing 93 percent of the insurance market in California had either restricted or stopped writing homeowners policies altogether!

From the aftermath of the Northridge earthquake, the CEA was born. We have been working with participating insurers and agents for more than 20 years to help get more Californians covered against earthquake damage.


Tom holtzer USGS Picture


2014 Napa Earthquake


  • Buildings destroyed: 1,568 homes sustained damage3, with hundreds of homes and businesses getting red or yellow-tagged
  • Monetary Loss: Approximately $500 million4

On August 24, 2014, a 6.0 earthquake occurred on the West Napa fault. Although it was what scientists consider a “moderate” earthquake, it caused extensive damage.

The take-up for earthquake insurance in Napa is about 6 percent, so many families had to rely on government assistance. To help in Napa’s recovery, FEMA provided disaster assistance up to $12.1 million. But, the average FEMA grant was $3,500 – not nearly enough to rebuild a home, replace personal property, or live elsewhere for very long while repairs were made.​

What Does This Mean for You and Your Clients?

Help your customers understand many disasters do not qualify for federal assistance and, if made available, it may take several months for then to get any help from the government. For example, FEMA individual assistance did not become available until two months after the August 2014 South Napa earthquake; however, CEA policyholders could access their loss of use coverage right away.

Test your EQ IQ

Question: Where was the epicenter of the 1989 Loma Prieta Earthquake?

  • Oakland, CA
  • San Francisco, CA
  • San Jose, CA
  • Santa Cruz, CA

Answer: The epicenter for the 1989 Loma Prieta earthquake was in the mountains of Santa Cruz, approximately 60 miles from San Francisco.

Make sure your clients know the risk, and that they are financially protected from earthquake damage with a separate earthquake insurance policy.

Order FREE direct mail and other sales items to send to prospective earthquake insurance clients from the MVP Agent Store, and order CEA policy brochures that detail the risk and provide policy solutions. There are policies and options to fit virtually everyone’s needs and budgets.