Commercial Earthquake Insurance
Standard commercial property policies do not cover earthquake damage. In Southern California the risk is real: the 1994 Northridge earthquake struck right here in our own neighborhood and damaged thousands of apartment buildings, offices and businesses across the San Fernando Valley. Pacific Southwest Insurance Services helps building owners, landlords, HOAs and businesses get commercial earthquake insurance for their buildings, contents and lost income.
Get a free earthquake quote. Call (818) 701-1033 or email info@pswinsurance.com. Office hours are Monday to Friday, 9:30 AM to 5:00 PM.
Why Commercial Earthquake Insurance Matters
- It’s excluded from your property policy. Without a separate earthquake policy, you would pay to repair or rebuild after shaking damage yourself.
- Your income can stop. Tenants may not pay rent, and your business may not be able to open, while the building is repaired.
- Lenders often require it. Many commercial and multi-family loans require earthquake coverage, especially for older or larger buildings.
- Repairs can trigger code upgrades. Rebuilding after a quake may require bringing the whole building up to current code.
Who Needs It
- Apartment building owners
- Owners of soft-story and older wood-frame buildings
- Office, retail and mixed-use building owners
- Industrial and warehouse owners
- HOAs and condo associations
- Business tenants who want to protect equipment, inventory and income
- Owners with lender earthquake requirements
Coverage Options
- Building coverage: repairs or rebuilds the structure after earthquake shaking damage.
- Contents coverage: covers equipment, inventory, furniture and fixtures.
- Loss of rents / business income: replaces rental income or lost profits while the building is being repaired.
- Extra expense: pays extra costs to keep operating, such as a temporary location.
- Ordinance or law: helps pay for required code upgrades and demolition during repairs.
- Standalone earthquake policies: a separate policy dedicated to earthquake.
- Difference in conditions (DIC) policies: a policy that adds earthquake, and sometimes flood, on top of your property policy.
How Earthquake Deductibles Work
Earthquake deductibles are usually a percentage of the insured value, not a flat dollar amount. Common deductibles range from about 5% to 20%.
Example: if your building is insured for $2,000,000 with a 10% earthquake deductible, you would pay the first $200,000 of a covered earthquake loss. The deductible often applies separately to building, contents and each building on the policy, so we’ll walk through exactly how yours would work before you buy.
A higher deductible lowers your premium but increases what you pay after a loss. Many owners choose a deductible they could realistically cover from reserves.
Soft-Story and Older Buildings
Many Los Angeles apartment buildings have a “soft” first story, such as tuck-under parking, that can collapse in a strong quake. The City of Los Angeles requires retrofits for many of these buildings: its soft-story program covers wood-frame buildings with two or more stories, built before January 1, 1978, with ground-floor parking or similar open space (buildings with 3 or fewer residential units are excluded). Owners must complete the retrofit within a set number of years after receiving an order to comply. See the LADBS Soft-Story Retrofit Program for details.
- A completed retrofit can make a building easier to insure and may help your rate.
- Keep your retrofit permit, engineering report and certificate of completion. Underwriters ask for them.
- Non-retrofitted soft-story buildings can still often be insured, usually through specialty markets.
- Other older building types, such as non-ductile concrete and unreinforced masonry, are also underwritten closely.
What Affects Your Premium
- Building construction type and year built
- Seismic retrofit status
- Soil type and distance to active faults
- Number of stories and building value
- Deductible percentage chosen
- Whether you include contents and loss of rents
- Occupancy and use of the building
As an independent agency, we compare earthquake options from multiple insurance companies, including specialty (surplus lines) markets.
Ways to Lower Your Earthquake Premium
- Complete a seismic retrofit and keep the documents
- Choose a higher percentage deductible
- Insure the building to an accurate replacement value
- Consider limits that cover a realistic loss rather than the full value, when your lender allows it
- Bundle earthquake with your property and liability coverage
What to Have Ready for a Quote
- Property address, year built, number of stories and units
- Construction type (wood frame, concrete, steel, masonry)
- Square footage and building replacement value
- Retrofit permit, engineering report or certificate of completion, if any
- Lender earthquake requirements, if any
- Contents and rental income values
- Seismic or engineering studies for larger buildings, if available
Why Choose Pacific Southwest Insurance Services
- Located in Northridge and serving California since 1965
- Access to standard and specialty earthquake markets
- Experience with apartment, soft-story and older buildings
- Fast evidence of insurance for lenders
- One agency for your property, earthquake, liability, commercial auto and bonds
- Se habla español
Frequently Asked Questions
Isn’t earthquake covered on my commercial property policy?
No. Earthquake shaking damage is excluded on standard commercial property policies. You need a separate earthquake policy or a difference in conditions (DIC) policy.
Does my property policy cover fire after an earthquake?
In California, fire that follows an earthquake is generally covered by your standard property policy, even though shaking damage is not. Check your policy with us to confirm, and remember that fire coverage alone won’t pay for shaking damage.
Can I get earthquake coverage through the California Earthquake Authority (CEA)?
The CEA insures homes, condo units and renters, not commercial buildings or apartment buildings. Commercial earthquake coverage comes from private insurance companies, which we can shop for you.
How much does commercial earthquake insurance cost?
It depends heavily on the building’s age, construction, retrofit status, location and the deductible you choose. The best way to know is to get a quote. We’ll show you options at different deductibles so you can compare.
Does a seismic retrofit lower my premium?
It can. Carriers consider retrofits when pricing, especially for soft-story buildings, and a completed retrofit may open up more insurance options.
Can I buy earthquake coverage right after an earthquake?
Insurers often stop writing new earthquake coverage for a period of time after a significant earthquake. It’s best to buy coverage before you need it.
My lender requires earthquake insurance. Can you help?
Yes. Send us your lender’s requirements and we’ll quote coverage that meets them and provide the evidence of insurance your lender needs.
Related Coverage
- Apartment Building Insurance
- Hard-to-Place Commercial Property Insurance
- HOA & Condo Association Insurance
- Mixed-Use Building Insurance
- Business Interruption Insurance
- Commercial Flood Insurance
- Landlord & Rental Property Insurance
See all commercial property coverage.
Get a Commercial Earthquake Insurance Quote
Tell us about your building and we’ll shop the market for you. Call (818) 701-1033, email info@pswinsurance.com, or visit our office at 9036 Reseda Blvd., Suite 105, Northridge, CA.