Because of this, and the inavailability of EQ insurance in general, if there is a significant Earthquake, then FEMA and State plans will be the way to find funds to rebuild or move on.
Lenders require the owner to have fire insurance but not earthquake. Most homes are made of plywood/wood if there is no fire involve the extent of the damage is not too bad(age and and building code matters). If you do not there is always Federal and state assistance programs(fema).There are teams of structural engineers that visit major buildings and other structures right after each earthquake to evaluate their conditions.
Lenders may work with federal/state program to relieve some of the obligations.
Prudential California Realty
I think that earthquake insurance was different back then. I don't think the state was selling policies or underwriting them as it is now.
I will ask around to see what I can find out but hopefully some one with experience will post.