California requires sellers of residential real property (1–4 units) to disclose whether the property is located in certain designated natural hazard zones. This is accomplished through the Natural Hazard Disclosure Statement (NHD), required under Civil Code §1103. Sellers must disclose if their property is in any of the following six statutorily required zones.
Important: Third-party NHD report companies (e.g., First American Natural Hazard Disclosures, JCP) prepare these reports for a fee based on public records. Agents and sellers commonly order a professional NHD report to ensure accuracy. However, the seller (not the report company) is responsible for the disclosure.
---
Designated by FEMA on Flood Insurance Rate Maps (FIRMs). Properties in SFHA zones (Zone A or Zone V) have at least a 1% annual chance of flooding (also called the "100-year flood" level).
Areas that could be flooded if a nearby dam failed. California OES (Office of Emergency Services) maps these zones. Properties downstream of major reservoirs may be in dam inundation zones.
Designated by the California Department of Forestry and Fire Protection (CAL FIRE) for areas within Local Responsibility Area (LRA) jurisdictions. These are areas where the terrain, vegetation, and fire history create elevated fire risk.
Designated within State Responsibility Areas (SRA) — areas where CAL FIRE (rather than local fire departments) is primarily responsible for fire protection. The most stringent fire risk designation.
Areas where developed land with homes and businesses intermingles with undeveloped wildland vegetation. The WUI is particularly relevant in California's foothills and canyons.
The California Geological Survey (CGS) designates Seismic Hazard Zones where liquefiable soils or landslide-prone slopes may be subject to seismic-triggered hazards.
---
Established by the Alquist-Priolo Earthquake Fault Zone Act (1972). Zones are mapped along known active fault traces in California.
This disclosure is in addition to the standard NHD — it is technically a separate required disclosure that accompanies the NHD report.
Requires state and local agencies to analyze and disclose the potential environmental impacts of their decisions (zoning changes, project approvals, etc.). Not a direct seller disclosure, but relevant when purchasing near proposed developments or infrastructure projects that may affect the neighborhood.
---
California homeowner's insurance policies do not cover earthquake damage — earthquake insurance must be purchased separately as a rider or separate policy. The California Earthquake Authority (CEA) offers earthquake insurance policies through participating insurers.
Key features of CEA policies:
Despite the high deductibility and availability of CEA policies, the majority of California homeowners do not carry earthquake insurance — an ongoing public policy concern given the state's seismic exposure.
---
California's growing wildfire risk has created a homeowner's insurance availability crisis:
---
---
Quiz Questions:
Q1. A property in Sacramento County is located in a FEMA-designated Zone A Special Flood Hazard Area. The buyer is obtaining a conventional mortgage. What is the likely insurance consequence?
A) No additional insurance is required; standard homeowner's insurance covers flood damage B) The lender will require the buyer to purchase flood insurance before the loan closes C) Flood insurance is optional but recommended D) The seller must purchase flood insurance before closing
Answer: B — For federally related mortgage loans (which includes Fannie Mae/Freddie Mac backed loans), lenders are required by law to mandate flood insurance for properties in SFHA zones (Zone A or V). Standard homeowner's insurance does not cover flood damage — a separate National Flood Insurance Program (NFIP) or private flood policy is needed.
---
Q2. The Alquist-Priolo Earthquake Fault Zone Act prohibits what type of construction within 50 feet of an active fault trace?
A) Commercial buildings only B) Any structure intended for human occupancy (habitable structures) C) All construction, including fences and non-habitable outbuildings D) Only buildings over 3 stories
Answer: B — The Alquist-Priolo Act prohibits the construction of habitable structures — buildings intended for human occupancy — within 50 feet of an active fault trace. Non-habitable structures (garages, sheds, fences) are not prohibited. A licensed geologist may be required to conduct a fault study if a site is near (but not confirmed within) the zone.
---
Q3. A seller's property in the Sierra Nevada foothills is in a designated Very High Fire Hazard Severity Zone (VHFHSZ). Which entity designates the VHFHSZ within State Responsibility Areas?
A) FEMA B) The local city fire department C) CAL FIRE (California Department of Forestry and Fire Protection) D) The California Geological Survey
Answer: C — CAL FIRE designates Fire Hazard Severity Zones within State Responsibility Areas (SRA). Local fire departments designate zones within Local Responsibility Areas (LRA). The California Geological Survey handles seismic hazard zones, not fire hazard zones. FEMA handles flood zones.
---
Q4. A buyer wants to verify that a potential home purchase in the Bay Area is not within a liquefaction or earthquake-induced landslide zone. Which agency's maps should they consult?
A) FEMA Flood Insurance Rate Maps B) California Office of Emergency Services (OES) maps C) California Geological Survey (CGS) Seismic Hazard Zone maps D) CAL FIRE Fire Hazard Severity Zone maps
Answer: C — The California Geological Survey (CGS) maps Seismic Hazard Zones that identify areas at risk for liquefaction and earthquake-induced landslide. These zones are required to be disclosed in the NHD. FEMA maps flood zones; OES maps dam inundation zones; CAL FIRE maps fire hazard zones.
---
Q5. A California homeowner whose property is in a Very High Fire Hazard Severity Zone is told by their insurance company that their policy will not be renewed. Where should they turn as a last resort for coverage?
A) FEMA National Flood Insurance Program (NFIP) B) California Earthquake Authority (CEA) C) California FAIR Plan D) The seller's previous insurance company is required to renew
Answer: C — The California FAIR Plan (Fair Access to Insurance Requirements) is the state's insurer of last resort for property owners who cannot obtain homeowner's insurance in the private market due to fire risk. It provides basic fire coverage but has limitations compared to standard policies. The CEA covers earthquakes, not fire. The NFIP covers floods.