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Why 8 Out of 9 Californians Don't Buy Earthquake Insurance

A man attempts to disentangle his daughter's car after the car port it was parked in collapsed on top of it as a result in downtown Napa, Calif., after an earthquake struck the area
A man attempts to disentangle his daughter's car after the car port it was parked in collapsed on top of it as a result in downtown Napa, Calif., after an earthquake struck the areaPhotograph by Josh Edelson/AFP via Getty Images

Early estimates suggest the economic losses from Sunday’s 6.0-magnitude earthquake in Northern California, the largest quake to hit the Golden State in 25 years, could hit $1 billion. When it comes to rebuilding, much of the cost will come out of people’s own pockets.

The percentage of homeowners with earthquake insurance in California and across the U.S. has declined, despite rising estimates of the risk of an earthquake. A survey by the Insurance Information Institute, a nonprofit that’s funded by the insurance industry, found that 7 percent of U.S. homeowners have earthquake insurance, down from 13 percent just two years ago. In the West, ground zero for U.S. quakes, 10 percent of homeowners have coverage, down from 22 percent a year ago; in California, about 12 percent do, according to the California Earthquake Authority.