Property Insurance FundamentalsQuestion 145 of 158
A California homeowner asks whether his standard HO-3 policy covers damage caused by an earthquake. The CORRECT answer is:
a.Yes, earthquake is a basic peril always included in the HO-3
b.No, earthquake is excluded; insurers must OFFER earthquake coverage separately (via the CEA or a stand-alone policy)
c.Yes, but only if the policy was issued before 1994
d.No, and earthquake coverage is not legally available in California
Explanation
Earth movement, including earthquake, is excluded under standard HO-3 forms. California Insurance Code §10081 and §10089 require admitted residential insurers to OFFER earthquake coverage, typically through the California Earthquake Authority (CEA) or as a separate stand-alone policy.
Law Reference: Cal. Ins. Code §10081, §10089Practice all 158 questions free — no signup required.
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