Natural hazards and home insurance in California

Main hazards in California and in Los Angeles

The state’s own seller disclosure form names the hazards that matter to a buyer. The Natural Hazard Disclosure Statement (Civil Code § 1103.2) asks whether a home lies in:

• a FEMA special flood hazard area (any zone “A” or “V”);
• an area of potential flooding on a dam failure inundation map;
• a high or very high fire hazard severity zone;
• a wildland area with substantial forest fire risks;
• an earthquake fault zone;
• a seismic hazard zone (landslide or liquefaction).

The form warns in capitals that these hazards may limit a buyer’s ability to develop the property, to obtain insurance, or to receive assistance after a disaster.

Wildfire zones. The State Fire Marshal classifies areas as moderate, high or very high fire hazard severity zones, based on fuel loading, slope, fire weather and wind (Government Code § 51178). The Office of the State Fire Marshal stresses that the maps measure hazard, not risk: expected fire behavior over a 30 to 50-year period, without counting home hardening, recent fires or fuel reduction. Its FHSZ viewer shows both state and local responsibility areas.

Los Angeles. The Palisades and Eaton fires led the Governor to declare an emergency on January 7, 2025, and the Insurance Commissioner then ordered a one-year moratorium on non-renewals in and around the burn areas (Department of Insurance, January 9, 2025). For earthquake and flood zones, the seller’s Natural Hazard Disclosure Statement shows which apply to a given address.

Wildfire coverage and the FAIR Plan

In high-hazard areas, the hard part is finding an insurer willing to write or renew a policy. State law gives owners three protections.

The moratorium has exceptions, such as fraud or gross negligence by the insured, or physical changes that make the property uninsurable (§ 675.1(c)). The Commissioner publishes the protected ZIP codes in a bulletin after each fire. If an insurer fails to send the required renewal or non-renewal notice, the existing policy stays in effect for 45 more days (§ 678(b)).

The FAIR Plan is the insurer of last resort. State law created it as an association of all insurers writing basic property insurance in California (Insurance Code § 10091). The Department of Insurance describes it as a limited fire policy for people who cannot get coverage from a regular insurer, with limits of $3 million per residential policyholder. It does not include water damage, liability or theft. To fill that gap, the Department points owners to a difference-in-conditions (DIC) policy, sold by separate insurers, alongside the FAIR Plan. You can apply through a licensed agent or broker or directly with the FAIR Plan.

Earthquake coverage

Every insurer that sells a residential property policy in California must offer earthquake coverage (Insurance Code § 10081). The Department of Insurance says the offer comes every other year, and you have 30 days to accept it. The required notice tells the owner, in bold type: “Your residential property insurance policy does not cover earthquake damage” (Insurance Code § 10083).

The offer must at least cover the dwelling and contents of not less than 10% of the dwelling loss or $5,000 (Insurance Code § 10089). One important exception: homeowners and renters policies must cover fire caused by or following an earthquake, whether or not you bought earthquake insurance (Department of Insurance).

Most earthquake policies are written by the California Earthquake Authority (CEA), which sells through member insurance companies (Department of Insurance). For a CEA homeowners policy:

Example

On a home with $600,000 of CEA dwelling coverage (Coverages A and B) and a 15% deductible, the owner pays the first $90,000 of covered earthquake damage. With a 5% deductible, the amount drops to $30,000, at a higher premium. The deductible is a percentage of the coverage limit, not of the damage (CEA).

Flood insurance and flood zones

Flood is a separate federal policy. Through the National Flood Insurance Program, building coverage reaches $250,000 and contents coverage $100,000 (FEMA FloodSmart). Coverage usually starts 30 days after purchase. There is no wait when you buy in connection with making, increasing, extending or renewing a mortgage. There is a one-day wait for a property in a newly designated high-risk zone, or for flooding caused or worsened by a wildfire on federal land if you buy within 60 days of containment. The CEA earthquake policy does not cover flood or tsunami (Department of Insurance). For the basics, see flood insurance explained.

Disclosure of hazard zones at sale

For a single-family home, the seller or the seller’s agent must disclose a location in a FEMA special flood hazard area, among other zones, when they know of it or when the local jurisdiction has posted a parcel list (Civil Code § 1103). The disclosure is made on the Natural Hazard Disclosure Statement, which may rely on a third-party provider’s report (§ 1103.2). If a map is not precise enough to tell, the seller must mark “Yes” (§ 1103.2(b)). The full disclosure package is covered in seller disclosure in California.

Premiums vary by address and insurer, so ask for quotes early. They affect your monthly payment; see homeowners insurance and closing costs in California. For a city view, see the Los Angeles guide.