Property Insurance FundamentalsQuestion 145 of 474
A California homeowner asks whether his standard HO-3 policy covers damage caused by an earthquake. The CORRECT answer is:
a.No, and California law bars admitted homeowners insurers from writing earthquake coverage, so the only source is a non-admitted surplus lines policy
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.Yes, earthquake is one of the basic perils on the HO-3, and California requires it to be written with a deductible of no more than 5 percent of Coverage A
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, §10089This topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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