On Jan. 17, 1994, the ground started shaking and in less than ten seconds there was devastation all over Southern California. At the time, the Northridge earthquake was one of the world's most expensive natural disasters, causing an estimated $35 billion in damage.
It changed insurance in the state.
"The insurance companies lost their shirts and they were going to leave the state, and so the California Earthquake Authority was created to be essentially the financial engine behind the ability for insurance companies to stay in California and provide insurance," said Janiele Maffei with the California Earthquake Authority.
Thirty years later, California is dealing with another insurance crisis. Homeonwer's policies are skyrocketing because of increased fire danger and companies are again leaving the state.
The number of earthquake insurance policies dropped by 5.5% last year. According to FEMA, only about 10-15% of homeowners have earthquake insurance. That's 1,615,561 policies in 2023.
If your home is damaged in an earthquake, regular homeowner's insurance won't cover anything.
Earthquake insurance is unique, however. It usually has a high deductible so it only pays when there is major damage.
"A home policy is probably $3,500, the earthquake insurance will be about $2,800," said Rick Dinger with Crescenta Valley Insurance. "But you have to understand, on a 2,200 square foot house, possibly, the deductible is about $118,000 so it's pretty heavy. The coverage is there but there has to be a lot of damage before the coverage kicks in."
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Maffei said Southern California has huge seismic risk.
Officials say since Northridge, there have been changes to make homes safer. There are retrofit programs to strengthen homes. Older structures built before 2000 as well as so-called "soft story" buildings are vulnerable. Those are the ones that usually have ground floor parking.
"Unfortunately, the garage has very little capacity to hold up that second floor in an earthquake. It has lots of bright open space because of the garage and that large garage door - you take out the elements that resist earthquake forces, which are walls, to create that garage," Maffei added.
Earthquake insurance isn't mandatory but Dinger said he has seen first-hand how these type of policies can help someone rebuild.
He said he was "lukewarm" to earthquake insurance - until he visited New Orleans a year after Hurricane Katrina.
"What you saw was that the people that had flood insurance were able to get their houses fixed. People that didn't have it, it's tough to get contractors, it's tough to get materials. It's tough to get all these things because the insurance companies come in and they kind of take all those materials and all the workers to take care of the insured claims," Dinger said.