In September 1996, the state Legislature established the California Earthquake Authority. The CEA is a privately funded, publicly managed organization that provides residential earthquake insurance to Californians. Designed to make quake insurance both available for consumers and financially viable for both insurers and their customers, the CEA is funded by insurance industry capital contributions and commitments, reinsurance and capital market borrowing. As of January 2006, the CEA had more than $7.2 billion in claims-paying capacity.

According to the U.S. Geological Survey, there is a 70 percent probability that an earthquake of magnitude 6.7 or larger will strike the San Francisco Bay Area during the next 30 years. However, while Californians live with earthquakes, an estimated 13 percent of California homeowners purchase earthquake insurance.

Three major factors determine the effect of an earthquake on a building or home and what you experience. First is the earthquake’s magnitude: The stronger the magnitude, the further away the quake’s seismic waves will be felt.

However, the movement experienced during an earthquake doesn’t depend just upon its magnitude. Where you are located in relation to the earthquakes epicenter also has an effect. The farther away you are, the less shaking you feel, since the seismic waves lose energy as they travel through the earth.